North American markets, viewed several hours before opening at 9:30 a.m. EST, appear poised to prove again the ongoing volatility of the investment environment with renewed optimism flowing from two factors. Major North American indicators are in the green. European markets are open at time of writing and most major indicators there are also in the green.
In a seemingly inexplicable development yesterday, AstraZeneca plc, whose announcement largely triggered the rally closed at $54.70, a somewhat surprising drop of $0.60 on the day.
Meanwhile Pfizer, whose announcement last week also triggered a Monday Rally, closed at $36.52, a drop of $0.18 on the day.
However, Moderna Inc. closed at $101.03. an increase of $3.42 on the day.
The exact reasons for the seeming paradox are unclear, especially since the AstraZeneca announcement drove yesterday morning’s rally. Part of the explanation might lie in projections according to Jay Nash, Senior Vice President at National Bank Financial in London. Nash says that the 70-90% efficacy claimed by AstraZeneca is not really a match for the efficacy rate of 95% claimed by Moderna. Nash adds that it is too soon to be absolutely certain about the reasons for difference in investor behavior.
In another surprise, perhaps more easily understandable, markets got a boost with the Wall Street Journal report that U. S. President-elect Joe Biden plans to nominate former Federal Reserve Board Chair Janet Yellen to be Treasury Secretary.
That fits one of the market’s requirements for stability, according to Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “A known commodity in an uncertain situation is a potential boon for the market,” he said in a Reuters report. “The Treasury is probably more important than Congress in getting the next stimulus package through. This removes a large roadblock,” he says, referring to one of the largest questions currently overhanging the market.
Indeed, stocks gained in the over night Asian markets as President-elect Joe Biden received the go-ahead to begin his transition to the White House. Implicit in this development is that plans for a stimulus plan can start moving ahead, however slowly. That added to yesterday’s news about vaccines. In turn, the European markets, already open at time of writing, picked up on the combination and North American markets will likely continue the upwards trend when they open at 9:30 a.m.
Four different perspectives on the effect of the pandemic are shaping up for today.
Best Buy Co. Inc reports its third quarter results, likely boosted by increased electronics gear necessary for employees and students suddenly doing more work at home as offices and schools closed or scaled back. Investors will be listening for the company’s Christmas outlook.
Tiffany & Co., being taken over by LVMH Moet Hennessy Louis Vuitton SE will report results including improved sales demand in China.
Nordstrom Inc. will report its third quarter results and will probably show a drop in consumer discretionary sales during the pandemic and investors here will also be listening for the company’s Christmas outlook.
Abercrombie & Fitch Co. and American Eagle Outfitters Inc. also report today and in both cases their results will reflect store closures and, as with Best Buy and Nordstrom, investors will be listening for the Christmas outlook.
Disclosure: I do not own shares in any company mentioned in this column.