Week of November 16, 2020

Another strong week in the U.S. equity markets last week with the Dow and S&P 500 posting solid gains.  On the week, the Dow jumped 4% while the S&P 500 reached another record high on Friday and gained 2.2% on the week. 

The NASDAQ which pared its losses later in the week, was stung by a stampede out of stay-at-home technology stocks and into value stocks on the hope that eventual widespread availability of a COVID vaccine will provide for life returning to “normal.”

This morning, Monday, November 16, Dow futures are pointing to a strong opening of trading on the announcement from Moderna that preliminary trial data showed its COVID vaccine was more than 94% effective.  Pfizer and BioNTech announced a week ago today that their coronavirus vaccine showed efficacy of more than 90%.

“We expect vaccine approval and distribution will serve as a catalyst for the trade and will drive positive EPS (earnings per share) revisions in many of the hardest-hit industries and most virus exposed companies,” said David Kostin, Goldman’s chief U.S. equity strategist.