Stocks Reach Record High On Vaccine Boost
4:11 pm Monday, August 23rd, 2021
Wall Street rallied on Monday, coming off a tumultuous week as investors digested full FDA approval of a COVID-19 vaccine and looked ahead to the Jackson Hole Symposium expected to convene later this week.
Perhaps the most influential headline for risk sentiment is the FDA granting full approval for the Pfizer (PFE)–BioNTech (BNTX) COVID-19 vaccine. On a related note, the IHME vaccine model suggests that Covid cases are peaking in the U.S.
The gains are relatively broad-based from the small-caps to the mega-caps and even commodities. Advancing issues outpace declining issues by a 2:1 margin at the NYSE and a 3:1 margin at the Nasdaq.
Seven of the 11 S&P 500 sectors are up more than 1.0%, including a 4% gain in the energy sector (+3.8%) as oil prices ($65.54, +3.40, +5.5%) rebound 5.5%. The top-weighted information technology sector is up 1.1%.
The exceptions include those in the defensive-oriented utilities (-1.2%), real estate (-0.5%), and consumer staples (-0.01%) sectors. Microsoft (MSFT 303.63, -0.74, -0.2%) is also catching its breath after breaking out to record highs last week.
Interestingly, Treasury yields are another exception to the rebound trade, perhaps because of the deceleration in preliminary manufacturing and services PMIs for August out of the U.S., Europe, and Japan.
In the U.S., the preliminary IHS Markit Manufacturing PMI decreased to 61.2 in August from 63.4 in July, and the Services PMI decreased to 55.2 from 59.9 in July. Note, this still indicated expansion territory since the readings were above 50.0.
The 10-yr yield is currently down one basis point to 1.25% after trading at 1.28% overnight. The U.S. Dollar Index is down 0.5% to 93.05. The CBOE Volatility Index was struggling to hold the 17.00 level.
