Vaccine hype spurs massive rotation in stock


When the pandemic struck America in March, the stock market imploded.

Vaccine hype spurs massive rotation in stock

Sectors closely tied to the “in-person” economy — travel, energy, restaurants, and retailers without an online presence — were hit the hardest.

Meanwhile, digital-friendly sectors such as cloud computing, streaming, at-home wellness, and gaming surged.

Yesterday, promising results from Pfizer’s phase 3 vaccine trial sparked a huge rotation in stocks, perhaps highlights of what’s to come.

The winners

  • Airlines: A vaccine is the first step in getting travelers back in the air. The sector ripped higher with Delta (+17%), American (+15%), and JetBlue (+22%) leading the way.
  • Energy: Pretty simple — if you’re not going anywhere you don’t need gas. The energy ETF XLE (+14%) jumped in hopes of a pickup in global movement of just about anything.
  • “Oh sh*t I might need to see other people”: The reality of the need to get dressed again set in as appearance stocks — from makeup (Ulta Beauty, +15%) to high-end clothing (Ralph Lauren, +20%) — saw huge gains.

The losers

  • At-home fitness: Who didn’t take advantage of Peloton’s $10 monthly sub during lockdown? Investors are clearly worried orders will dry when gyms reopen, and $PTON (-20%) was down big.
  • Remote work plays: Will a return to work reduce the need for Zoom meetings and Docusign virtual signatures? $ZM (-17%) and $DOCU (-15%), 2 COVID staples, both had brutal days.
  • Chillin’ at home: Are the days of ordering Dominos, and bingeing Netflix numbered? $DPZ (-6%), and $NFLX (-9%) were both down.

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