This morning equities were looking higher in large part to the notion of divided government and election resolution, although President Trump is pursuing legal remedies. It’s clear the stock market thinks the election is over and the GOP will retain control of the Senate.
Then came news from Pfizer (PFE) that their Covid19 vaccine candidate is 90% effective and ready for prime time, as the company plans to file for emergency FDA approval later this month.
- 44,000-person trial
- 94 Covid19 cases
- 9 or fewer of positive cases received two shots of vaccine
An interesting, but prevalent sidebar is President-elect Biden was prepping his Covid19 team and leaning toward stricter restrictions. His initial statement over the Pfizer news was less sanguine than I would have thought for a vaccine that helps 90% of users.
Vaccine Winners
- UAL
- AAL
- DAL
- JBLU
- LUV
- RCL
- CCL
- Crude Oil
Vaccine Losers
- ZM
- PTON
- NFLX
- TDOC
- DOCU
Note: the challenge for investors is to know which of today’s winners can keep moving higher and which of the losers could become oversold. I still think you have to trade the names on both lists.
There are a lot of tech names that are not pure stay and home names but might get hit hard at the start of trading. I will be looking deeply at these for opportunities to buy weakness.
Biden & GOP Senate
Without the Senate, a President Biden would be hard pressed to get through the more draconian aspects of his agenda. The biggest winners are small businesses, which are known as pass-through businesses and file as individuals. The next big winner are investors. Not just stock, but any investor, and this is great news for a nation built on investment.
I still worry about opening the floodgate for foreigner tech workers that get paid less than Americans. Why the hell do they keep telling use to teach our daughters how to code when they want to give the jobs to folks that will take less pay. The news has tech stock soaring, but it is not great for our children.
Policy Proposal | Stocks impacted (Positive or Negative) | Required for Approval |
Repeal Tax Cuts & increase capital gains | Earnings Growth | Congress & 51 Senate votes |
Provide additional fiscal stimulus | Earnings Growth | Congress & 60 Senate Votes |
Expand ACA and create public option | ANTM, UNH, HUM, MOH, WCG, CI, CYH, THC, HCA, UHS | Congress & 60 Senate Votes |
Allow Medicare to negotiate drug prices | LLY, MRK, BMY, AGN, AMGN, TEVA. | Congress & 60 Senate Votes |
New Carbon tax, ban offshore drilling | XOM, CVX, BP, COP, OXY, WLL, SM, XOG, CLR, MRO, HAL, SLB | Congress/60 Senate votes and some exec authority |
Climate Change Plan | TAN, FSLR, SPWR, JKS, CSIQ, RUN, FE, NEE, NLR, EXC, CCJ | Congress &60 Senate Votes |
Increased banking regulation | XLF, BAC, C, WFC, GS, MS, USB, PNC | Executive Authority/Court Challenges |
Abolish private prisons | CXW, GEO | Congress& 60 Senate Votes |
Infrastructure | FLR, KBR, ACM, GVA, USCR, VMC, MLM, CAT | Congress & 60 Senate Votes |
Increased technology regulation | AAPL, FB, AMZN, GOOG, TWTR | Executive Authority/Court Challenges |
Weed decriminalization not legalization | ACB, TLRY, CRON, CGC, MJ | Congress & 60 Senate votes |
2-year free college & expand debt relief | NAVI, SLM | Congress & 60 Senate Votes |
Raise minimum wage to $15/hour | DG, DLTR, BIG, FIVE, WMT, TGT | Congress & 60 Senate Votes |
Increase defense spending | GD, NOC, LMT, HRS | Congress & 60 Senate Votes |
Crack down on China reevaluate tariffs. | Semis, retail, industrials, autos, and agricultural | Executive Authority |
Hotline Model Portfolio Approach
We are adding to Industrials this morning in our Hotline Model Portfolio.
Today’s Session
Major indices are looking to open at all-time highs. Then, the interesting thing will be to see which wins the rest of the session:
Panic buying or profit-taking?
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