Update-1 11/20…a bit of a sell-off at the end of the day probably on Mnuchin “war of words” with FED on $500B.

  • “Re-opening type” trades in XLF and XLI both down 0.9%;XLK down 1%.
  • Materials doing well CLF, FCX; chips mixed slightly down.
  • IBB and XBI up a tad; large cap winners -ABBV,AZN,LLY,VRTX.
  • Notable coronavirus movers: BNTX,CODX,CVAC,GNMK, MRNA,TDOC.
  • Lots of “green action” in mid caps: AGIO, ASND GWPH,,NVCR, RGEN.
  • Pfizer/BioNTech applies for emergency approval.of COVID vaccine.


The Re-Opening Trade Is On Catalyzed by COVID Vaccine News

  • Broadening of Rally in NOV. rotating to Financials, Industrials and Materials.
  • Biotech is Still a Core Holding as is Healthcare despite some recent weakness.
  • Weak dollar boosts Small Caps track IWM.  Speculation continues track IWC.

The paradox of a strong stock market juxtaposed with surging COVID cases has apparently been triggered by the Moderna and Pfizer vaccine news .Although Coronavirus stocks have made huge gains in 2020, especially vaccines, the volatility of some high fliers like Moderna (MRNA) and Quidel (QDEL) has been huge.Only a few coronavirus stocks are near 2020 highs. Moderna is already more than 10% off this week’s highs. Pfizer(PFE) and BioNtech (BNTX) announced today that their Phase 3 vaccine results achieved all primary endpoints with 95% efficacy.Both stocks are up.

COVID testing stocks are weak today? ABT,HOLX, OSUR, QDEL, TMO.

Now we have a slight rotation to a 2021 “re-opening” scenario buoyed by vaccine optimism and zero interest rates.Today the rotation picked up with financial, energy REITs showing nice gains.The Financial Select SPDR (XLF) is up 15% this month and today among the gainers are C, JPM and MS. Oh and by the way energy (XLE) is already up 20% in one month.  Industrials may be your best new trade with the XLI up 10% in November and today.The NASDAQ-100 (QQQ) is still one of the best ETFs within 5% of 2020 highs at $291.

Biotechs are Choppy Today-XBI Down 0.65%.

Still biotech and healthcare remain core positions which we track in our portfolio below. Our core large cap holdings are Abbott (ABT), Abbvie (ABBV), Bristol-Myers Squibb (BMY), Johnson and Johnson (JNJ), Merck (MRK), Roche ADR (RHHBY). Or just buy the IBB and XBI. Thermo-Fisher (TMO) which we covered years ago is up 42% YTD and T.Rowe Price Health Sciences Fund (PRHSX) is up 23% YTD. Both plays are broad based life science tools, diagnostics and lab medicine.TMO is down 4.94% today?!

Keep in mind with COVID cases rising, there is the risk of a lockdown with an economic fallout. This puts any rotation trade at risk especially after big gains month to date. And no help from stimulus near term.

Healthcare ETF Portfolio

Stock/ETF Ticker Price 10/25 Weight P 11/13 % Perf week
iShares NAZ Bio IBB 136 25 141.06 2.52
iShares Russell 2k IWM 163 10 173.51 6.07
Merck MRK 80 10 81.09 0.93
United Health UNH 330 25 355.67 2.375
SPDR S&P Bio XBI 117 5 125.04 4.35
Healthcare SPDR XLV 108 25 112.12 1.98

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