A test tube labeled with the vaccine is seen in front of the Covid-19 and stock chart logo in this illustration taken on September 9, 2020.
Given Ruvic | Reuters
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The more positive news on the vaccine front is expected to drive stocks higher on Monday, especially names linked to an economic reopening. For investors looking to ride the big vaccine-led rally, Goldman Sachs has a basket of high-value stocks ready to reap the greatest benefits.
David Kostin, the bank’s leading US equity strategy, advised clients to hold tactical positions in value stocks amid promising vaccine news. Moderna said Monday’s preliminary test data showed its coronavirus vaccine was over 94% effective, following Pfizer’s announcement last week that its vaccine candidate surpassed 90% success. in virus prevention.
“We expect the vaccine’s approval and distribution to serve as a catalyst for commerce and drive positive EPS reviews in many of the worst affected industries and companies most exposed to the viruses,” Kostin said in a statement.
Pfizer vaccine development triggered a market rotation in value stocks and out of growth names last week, and the change is expected to accelerate on Monday with the news from Moderna. Investors flocked to companies that would benefit from an economic return next year, dumping high-flying tech stocks that held out during the pandemic.
Goldman looked at the S&P 500 for companies whose earnings estimates are still significantly below pre-pandemic levels. The bank believes these names could see a drastic rebound in profit expectations and have the potential to drive market gains.