Market Blowout on Vaccine Progress, News of Biden Victory

The S&P futures surged today on two catalysts Monday.

First, global markets cheered the prospect of Joe Biden winning the 2020 election and presiding over a divided government. The general attitude is that Biden will not be able to introduce radical programs like a Green New Deal or even eliminate tax cuts without GOP support. Effectively, things will remain the same… but there will be less political uncertainty, animosity, and tension for the time being. 

Meanwhile, the bigger driver of today’s rally is news from Pfizer and BioNTech. 

The companies announced that their COVID-19 vaccine has a 90% rate of efficacy. Previously, Dr. Anthony Fauci said that a efficacy rate of 50% would be acceptable. This is a major development given the quest to control the virus that has pummeled the U.S. economy.

However, investors need to be patient. It could still take months for the vaccine to get deployed. And, we still need Americans to take the treatment. It could still be a long winter for COVID-19 as cases continue to rise. 

Let’s take a look at the numbers from Friday before we get into the headlines driving the futures market. 

Here are the key headlines that are driving the Dow Futures this morning. Look for additional updates throughout the day.

The Rundown: Today’s Top Market Stories 

  • Stay At Home Stocks Take a Hit: Right now, airline stocks and cruise stocks are surging thanks to Pfizer’s update on its latest vaccine. But “Stay at Home” stocks took a pounding. Shares of Zoom Video (ZM) were off 16% this morning. Teladoc Health (TDOC) fell 7.4%, while Shopify and Amazon both took a few hits. 
  • Cases Continue to Rise: While many investors are hoping for a vaccine, COVID cases continue to rise across the country. This morning, Johns Hopkins reported the tenth-straight day of increasing cases. 

Today’s Top Stocks to Watch: CUBA, CCL, RCL, BIF, BRK.A

CUBA: The Herzfeld Caribbean Basin Fund (CUBA) is up 4% today, despite news that stocks like Carnival Cruise Lines (CCL) and Royal Carribean (RCL) have rallied. The closed-end fund has a large holding in these cruise lines. It also would benefit from normalization of relations between the United States and Cuba, which will likely occur under a Biden administration. The fund currently pays a dividend of 15%.

BIF: Shares of Boulder Growth & Income (BIF) added 5.3% this morning. Again, this is a closed-end fund. It owns a massive stake in Berkshire Hathaway (BRK.A) stock and the stocks held by Warren Buffett’s company. Buffett’s firm reported that it repurchased $9 billion in stock during the third quarter. BIF trades at a sharp discount to its NAV and pays a dividend. You can’t say that for Berkshire.