Target, Boeing, Pfizer Lead Stock Market Gains As Vaccine Rally Resumes

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Topline

Stocks are getting a solid boost Wednesday from a slew of announcements and earnings results that–although not completely surprising–help ramp up bullishness on the timeline for widespread vaccination and the outlook for consumer spending.

Key Facts

Shortly after the opening bell, the Dow Jones Industrial Average was climbing 115 points, or 0.4%, while the S&P 500 edged up 0.2%, and the tech-heavy Nasdaq was virtually flat.

Boeing shares are leading gains in the Dow and S&P, climbing nearly 7% after the Federal Aviation Administration cleared the firm’s 737 Max model for flight following a 20-month grounding prompted by two fatal crashes within five months of each other. 

Pfizer ticked up 3% after announcing the end of its clinical trials and a 95% efficacy rate (besting its previously announced 90%); the New York-based pharma giant said it will apply for an emergency use authorization “within days.”

Headlining the morning’s earnings, Target reported massive sales growth of nearly 21%, beating Wall Street expectations with $22.6 billion in third-quarter revenue thanks in large part to a 155% surge in online sales (boosted by the firm’s same-day delivery offering).

Despite reporting more than 30% growth in sales, Lowe’s, on the other hand, failed to meet earnings expectations as coronavirus-related expenses–including $245 million “to support frontline hourly associates”–pushed profits down; the firm’s shares were falling roughly 6.5%, the morning’s biggest stock decline in the S&P.

Global markets also ticked up on the Wednesday morning vaccination prospects: The United Kingdom’s FTSE 100 added 0.4%, and France’s CAC 40 climbed 0.5%, while Japan’s Nikkei 225, which has been floating around a nearly 30-year high, ended the day down 1.1% before Pfizer’s announcement.

Crucial Quote 

“In the very near-term, it’s important to note that the Boeing and Pfizer news, while positive, shouldn’t be terribly surprising to investors,” says Vital Knowledge Media founder Adam Crisafulli, noting that the FAA has been intimating for more than a week that it would grant the 737 MAX approval on Wednesday, while Pfizer’s data was very consistent with previously released results. “All the headlines and data points continue to support the pro-cyclical and value rotation in markets… The vaccines will provide powerful aircover for investors to continue shifting into cyclical and value–and out of growth and momentum.”

Big Number

$900 billion. That’s the approximate cumulative annual revenue of all the retailers that have reported earnings in the last 24 hours, according to Crisafulli, who adds that despite worse-than-expected retail sales data from the Census Bureau on Tuesday, all the reporting retailers (including Walmart, TJMaxx and Home Depot) “were bullish on the outlook for the consumer.”

Tangent

Monthly housing starts, a measure of new residential construction and an indicator that’s been bullish amid the pandemic, surged 4.9% in October (from September) to more than 1.5 million. Economists were expecting growth of 2.9%.

Surprising Fact

The price of bitcoin has soared nearly 5% in the past 24 hours to about $17,800, near levels unseen since before prices crashed in late 2017. A survey from wealth advisory deVere Group showed that 73% of its millionaire clients already invested or plan to invest in cryptocurrencies. According to CEO Nigel Green, investors like bitcoin as a “hedge against longer-term inflation concerns,” which have risen as governments around the world–and particularly in the U.S. and Europe–hike up spending–and load up on debt–to provide coronavirus relief.

Further Reading

Boeing 737 MAX Cleared To Fly Again After Nearly Two Years (Forbes)

Target Sales Just Shocked Wall Street. Here’s How CEO Brian Cornell Did It. (Forbes)

Pfizer-BioNTech Says Covid-19 Vaccine Is 95% Effective, Will Seek Emergency Approval Within Days (Forbes)