“It’s a risk on day. It’s going to be the reopening stocks and what’s going to lag is the stay-at-home stocks. We’re in a transition period,” said Doll, adding for the trade to persist, investors will need to have confidence the global economy will be able to grow at a sustainable pace.As the Dow and S&P 500 rallied to record highs, Treasury yields pressed higher, with the 10-year yield rising to 0.95%, its highest level since March. Yields move opposite price, and bonds sold off as investors focused on the potential improvement in the economy. “If you can look forward and say we’re going to return to something closer to normal life, a lot of those cheap stocks could look attractive. This could be the beginning of the rotation into value and small caps that we’ve talked about for a long time,” said Ed Keon, chief investment strategist at QMA.The small cap Russell 2000 jumped 5.5%. The high flying FANG names, however, lagged. Facebook and Amazon were both down nearly 3%, and analysts said they could now underperform if the value rotation continues.“We didn’t get a blue wave, and now we have an announcement of a vaccine, and there are people today who are capitulating. You don’t get a Dow up 1,300 points without people capitulating,” said Bob Doll, chief equities strategist and portfolio manager at Nuveen. Doll said the news has forced investors, who were waiting for the election to be over or worried about the pandemic, to take cash off the sidelines.- Advertisement – Stocks skyrocketed and bond yields surged as investors bet Pfizer’s Covid-19 vaccine will help the broader economy recover and revive cyclicals and other industries that were beaten down by the pandemic.The Dow was up more than 4%, while Nasdaq was up just 1% as laggard sectors like energy and financials outperformed tech. Stay-at-home plays, like Netflix and Zoom were sharply lower, but airlines rallied 16%. The S&P energy sector, still down 45% this year, was up more than 14%, and financials were up 8%.Pfizer announced earlier Monday that its vaccine is more than 90% effective, and while it will not be broadly distributed for months, investors bet that the economy will reopen and people will travel, return to work and be able to gather again in public in the next year.- Advertisement – – Advertisement – The Wall Street Bull (The Charging Bull) is seen during Covid-19 pandemic in Lower Manhattan, New York City, United States on May 26, 2020.Tayfun Coskun | Anadolu Agency | Getty Images The vaccine news comes as the coronavirus is again spreading at a rapid rate, with record levels of new cases that could result in more partial shutdowns and more months of social distancing and other precautionary behavior.But the vaccine should still help the outlook.“I think people are going to stop having anxiety everyday…I think we see the beginning of the end. That’s a big deal,” said Tom Lee, Fundstrat head of research. “I think the market was happy to wait until we got vaccine progress before we got the rotation. There was a huge amount of underperformance in these cyclicals and epicenter stocks. We could see months and months of this. This could rally for awhile.”Lee said the market is looking ahead, and is not focusing on valuations but on the prospect of earnings revisions for many companies. Cruise stocks, for instance, soared on optimism that bookings will increase. Royal Caribbean was up 25%. Movie theatre operator AMC Entertainment surged 60%.“The public mood will change, then the confidence surveys will show that. CEOs will have more visibility, and then people will start to say earnings will go up a lot,” said Lee.Lee said investors have been holding too much cash. “People have been doomsaying for so long. It’s more likely we’re going to rally for some period of time. We’re in the final months of the year, and that Santa Claus rally could kick in,” said Lee. Lee said stocks could rally another 10%, taking the S&P 500 to 3,900 by year end.Stocks also got a lift from the possible resolution of the U.S. election, with Democrat Joe Biden declared the presumptive winner on Saturday. President Donald Trump has not conceded, and Republicans are waging legal challenges to the results in some states.“Despite the Trump campaign’s commitment to more legal action, my observation is the markets are signaling the election has been resolved. The outcome has been determined,” said Michael Arone, chief investment strategist at State Street Global Advisors. “The market is moving on like this is a done deal.”Stocks rallied last week, as investors welcomed a split government, with a Democrat in the White House, but Republicans still holding the Senate. The fear had been that Biden could implement market unfriendly policies like higher corporate and capital gains tax rates if Democrats gained control of the Congress.JPMorgan strategists said the S&P 500 should be at 4000 by early next year based on the combination of the Biden victory and the vaccine. “The equity market is facing one of the best backdrops for sustained gains in years. After a prolonged period of elevated risks,” they wrote. Gridlock in Washington should likely result in no tax increase and a ratcheting down of trade wars.Analysts said there are plenty of risks remaining, including the fact that Congress has not passed a stimulus package.Lee said stimulus is a necessary bridge to help businesses and individuals get through the next couple of months, while they await a vaccine. If Congress continues to battle about it, that could be a negative.“This is not about a fiscal deficit. This is about people needing a financial lifeline urgently,” said Lee.Arone said the Pfizer news is extremely positive and the market should rally on it. The market expects change, but consumer behavior has to start to change to support the gains in leisure and other stocks. Value stocks have also had a number of false rallies.“The big question is once a solution is determined, given the environment, are we in this much greater growth, higher inflation, potentially higher rates – a global economic recovery? Of that, I’m more skeptical. I need to see more evidence of that,” he said. – Advertisement –
The No. 1 University of Wisconsin women’s hockey team (23-3-0, 13-3 WCHA) heads to Bemidji, Minnesota, this weekend for a road series against the Bemidji State Beavers (9-15-2, 6-8-2).The last time these teams met was in mid-November when the Badgers outscored the Beavers 8–0 in a dominant weekend sweep at LaBahn Arena that also featured a tremendous goalkeeping display from junior Kristen Campbell. Six different Badgers scored that weekend.Women’s hockey: Badgers outscore Bemidji State 8–0 in dominant weekend sweepThe No. 1 Wisconsin women’s hockey team continued its commanding 2018 campaign over the weekend, sweeping the Bemidji State Beavers Read…The Badgers should have no problem replicating their offensive from their previous meeting in November. Last weekend, Wisconsin’s offense got back on track with eight goals against St. Cloud State after struggling against Minnesota a week earlier.After leading the Badgers to a sweep of St. Cloud State, both Mekenzie Steffen and Campbell earned WCHA weekly honors. Steffen recorded her first career multi-goal game in Friday’s 5–0 victory, while Campbell registered a shutout in Friday’s victory while only allowing one goal over the weekend.The Beavers are led by sophomore Clair DeGeorge, who leads the team with 18 points (eight goals, 10 assists), and are 4-2-1 since play resumed after the winter recess. They are coming off an eight-goal weekend against Minnesota State that resulted in a 5–2 victory and a 3–3 tie.Look for Wisconsin to come out firing, as the Badgers are now outscoring their opponents 42-12 in the first period after last weekend’s sweep.Women’s hockey: Comparing success of this year’s Badgers to past championship teamsThe University of Wisconsin women’s hockey team has undoubtedly enjoyed a dominant season up to this point. With a No. Read…Wisconsin is 73-5-4 all-time against Bemidji State, with just one loss to the Beavers since 2013. The Badgers are 29-1-3 all-time on the road against the Beavers, and enter the weekend having won 17 straight against their WCHA rivals.Puck drop on Friday is set for 6 p.m., while Saturday’s game is set for 3 p.m. Both can be streamed on FloHockey and can be followed live on Twitter @BadgerWHockey.