Pfizer and BioNtech’s covid-19 vaccines news brought a smile on a lot of faces on Monday but escaped some key beneficiaries of the stay-at-home trend on Wall Street.
With equity markets now at all-time highs, it might be time for investors to trim holdings.
Pfizer and BioNtech’s covid-19 vaccines news brought a smile on a lot of faces on Monday but escaped some key beneficiaries of the stay-at-home trend on Wall Street. Stocks of video conferencing application Zoom Video tanked over 17% on Monday, followed by almost all the FAANG stocks that comprise the popular internet giants like Facebook, Amazon, Apple, Netflix, and Google. The expectation of soon stepping out of and witnessing normalcy is what pushed these lower.
While Zoom Video’s stock price fell 17.2%, popular streaming platform Netflix slipped 8.59%. Facebook was down 5% while Apple fell 2% and Jeff Bezos’ Amazon fell over 5%. Google ended with marginal gains of less than 1%. The FAANG stocks have so far surged at least 50% from their March lows. Zoom Video on the other hand has jumped 5 times.
The Nasdaq index fell over 1% on Monday while Dow Jones and S&P 500 ended with gains. Nasdaq has a high weightage of technology companies that were largely in the red on Monday. “I think you have to be prepared for a multiday sell-off in the Covid names,” said Jim Cramer, host of CNBC’s Mad Money show. Jim Cramer, who is a former hedge fund manager, said that the stocks that made huge strides during the lockdown are ripe for profit now after months of gains.
Wall Street saw travel companies like Carnival, Royal Caribbean Cruise, and Expedia skyrocketed on Monday jumping in double digits. Carnival shares jumped 39%. Even Airline stocks that Warren Buffett had written off earlier this year were seen taking off from the runway. Shares of American Airlines shot up 15% and Southwest Airlines gained over 9%.
The stir-up on Wall Street was caused by Pfizer’s announcement regarding its trial coronavirus vaccine. Pfizer and BioNtech said that the vaccine achieved over 90% vaccine efficacy in preventing COVID infections based upon the first interim efficacy analysis of 94 confirmed cases. Morgan Stanley in a note said that they look forward to tolerability and safety details of the vaccine, which have not yet been disclosed. Morgan Stanley has a target price of $42 on Pfizer. “The target multiple is at a slight discount to the peer average of 13x, which we believe is warranted due to slightly lower growth prospects,” it said.
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