News that Pfizer's (PFE) covid vaccine was found to be over 90% effective in preventing Covid-19 has caused a frenzy of buying. There is a vicious rotation taking place as stocks that benefited from covid like Zoom Video (ZM) and Peloton (PTON) are being pounded, while money rotations into airlines, retail, and a variety of other stocks that have suffered recently.
There is quite of bit of selling into the stocks that are being chased and there are areas of major weakness like precious metals. Breadth is about 5 to 1 positive and the number of new 12-month highs has exploded to over 1000.
The FATMAAN names are mixed and are underperforming. This has been a 'safe haven' that outperformed during the covid crisis and now they are on the wrong side of the rotation.
To add to the chaos several major brokers are having technical problems. There are reports that Schwab, Merrill, and Fidelity are having major issues.
The vaccine news marks a major turning point and the issue now is to navigate this rotation. Many of the 'stay at home' names are likely to see very strong business trends but others will see a sharp drop. Sorting out which ones have longer-term prospects is key.
Due to the broker issues, I have been unable to do much but I will be looking to play those names that benefit from reopening. One name on my radar is Macy's (M) which should be a leader in the retail space. So far the big gap there is being sold but I will be looking for some support to form soon.
