Positive COVID-19 Updates Push ‘Stay-At-Home’ Stocks in Correction

UTC by Bhushan Akolkar · 2 min read
Positive COVID-19 Updates Push ‘Stay-At-Home’ Stocks in Correction
Photo: Depositphotos

All tech companies like Zoom Video, Amazon, Netflix, and Shopify entered major correction on Monday as Pfizer and BioNTech announced that its COVID-19 vaccine candidate has delivered a 90% efficacy rate.

On Monday, November 9, the positive news of Pfizer‘s COVID-19 vaccine candidate rocked the US stock markets and especially stay-at-home stocks. The Dow Jones Industrial Average (INDEXDJX: .DJI) jumped over 1000 points in the early trading session.

The stock movement, however, was quite hysterical. Tech stocks, especially the ones categorized as ‘stay-at-home’ stocks tanked majorly. Zoom Video Communications Inc (NASDAQ: ZM) shares price collapsed over 17% on Monday closing at $413.34. Despite this major fall, Zoom videos shares still trade at 500% premium year-to-date. With more business online, the Zoom video has registered the best year of business. At present, the company valuations stay at $117 billion.

Other tech stocks like Netflix Inc (NASDAQ: NFLX) and Amazon.com Inc (NASDAQ: AMZN) tanked 8.5% and 5% respectively. Canadian multinational e-commerce company Shopify Inc (NYSE: SHOP) tanked 13.6%. A large number of investors have been betting big on these tech stocks as the coronavirus pandemic gets severe. Moreover, with the recent surge in cases, these stocks attracted more capital.

NFLX stock is still up 69% this year while AMZN stock is up 60% year-to-date, at press time. Similarly, SHOP stock is up 45% year-to-date. But it looks like the positive news of vaccine development pushed investors to book profits on Monday.

‘Stay-At-Home’ Stocks and Others Benefited with COVID-19 Vaccine Updates

On Monday, pharmaceutical giants Pfizer and BioNTech reported that its COVID-19 vaccine candidate has shown a 90% efficacy rate. Scientists have been working for a long for a vaccine candidate that shows a 75% efficacy rate and we already have it now.

“I think we can see light at the end of the tunnel,” said Pfizer Chairman and CEO Dr. Albert Bourla. Banking giant Goldman Sachs has predicted that we are headed for a V-shape recovery in 2021. By far, analysts are expecting that we can see a COVID-19 vaccine by January 2021.

While the tech stocks tanked on Monday, banking stocks showed strength. JPMorgan Chase & Co (NYSE: JPM) jumped 13.5% and Bank of America Corporation (NYSE: BAC) surged 14.2%. Cruise operators like Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) and Carnival Corp (NYSE: CCL) jumped 26.8% and 39.3% respectively. However, they are seriously down today. Airline stocks like American Airlines Group Inc (NASDAQ: AAL) surged over 15% while Royal Caribbean Cruises Ltd (NYSE: RCL) surged 28.8%. Their prices are falling today as well.

Currently, this is quite a sectoral performance that we saw on Monday. Companies will still take some time to overcome the blows that the pandemic has caused.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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