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Irrational Exuberance? Stocks Surging, Markets At All-Time Highs On Pfizer's COVID-19 Vaccine News

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Irrational Exuberance? Stocks Surging, Markets At All-Time Highs On Pfizer's COVID-19 Vaccine News

The S&P 500 skyrocketed 3.2% on Monday morning following news from Pfizer Inc. (NYSE: PFE) that its coronavirus vaccine candidate is more than 90% effective. While the news triggered a broad market rally, stocks that have been hit hardest during the pandemic were some of the market’s biggest movers.

It’s understandable why investors would be excited about a coronavirus vaccine that is 90% effective given the typical annual flu vaccine is only about 40% effective. However, some experts are already concerned Monday’s extreme move could be a bit overly optimistic.

Experts Weigh In: Nigel Green, the chief executive and founder of deVere Group, said traders may be “overthinking” the vaccine news, especially given that the Pfizer vaccine is not FDA approved and may take months to be widely available.

“I would urge investors to remain optimistically cautious and avoid the ‘buy everything’ mindset,” Green said.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said the vaccine could be a “game-changer” for investors, but they shouldn’t expect the perfect storm to last forever.

“Given the good economic news that this repricing is anticipating, markets are in a temporary state of high liquidity and fiscal stimulus at the same time that the economy is improving. This won’t last forever, but while it does it is extremely bullish for risk assets,” Zacarrelli said.

See Also: Biden And Trump React To Pfizer's Vaccine Update, Stock Market Rally: 'Great News!'

Stocks On The Move: Monday mornings biggest winners included travel stocks, such as cruise lines:

  • Carnival Corp (NYSE: CCL) was up 39.8%
  • Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) was up 31.5%.
  • Royal Caribbean Cruises Ltd (NYSE: RCL) was up 34.2%.

Airline stocks also experienced heavy buying on Monday morning following the vaccine news:

  • Delta Air Lines, Inc. (NYSE: DAL) was up 16.6%.
  • Southwest Airlines Co (NYSE: LUV) was up 17.6%.
  • American Airlines Group Inc (NYSE: AAL) was up 15.2%.
  • United Airlines Holdings Inc (NYSE: UAL) was up 20.2%.

Movie theater and live entertainment stocks were also on fire following the vaccine news:

  • Walt Disney Co (NYSE: DIS) was up 12.5%.
  • Live Nation Entertainment, Inc. (NYSE: LYV) was up 28.9%.
  • Six Flags Entertainment Corp (NYSE: SIX) was up 32.1%.
  • AMC Entertainment Holdings Inc (NYSE: AMC) was up 55%.
  • Cinemark Holdings, Inc. (NYSE: CNK) was up 42.1%.
  • Dave & Buster's Entertainment Inc (NYSE: PLAY) was up 49.3%.

Benzinga’s Take: There’s no question the vaccine news is good for stocks, especially the ones mentioned above who have had their businesses completely decimated by the pandemic. However, investors need to remember that it will still take a long time for most of those businesses to return to normal, and some of them may never get back to where they were before the health crisis.

 

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