Stocks Too Frustrated To Enjoy Vaccine Rollout

A coronavirus vaccine finally started rolling out in the U.S. on Monday, but it wasn’t much help to stocks as the market is more concerned about the next few months.

The Pfizer/BioNTech vaccine achieved emergency use authorization over the weekend and started being administered to healthcare workers today.

At the same time though, the mayor of New York City warned of a “full shutdown” soon, which is representative of renewed restrictions all over the country amid rising coronavirus cases.

Investors are confident that the pandemic’s days are numbered, but it’s going to be a while until we get back to normal. And so stocks remain under pressure.

The S&P is now on a four-day losing streak, as it slipped 0.44% in the session to 3647.49. Last Tuesday, the index closed above 3700 for the first time, but it hasn’t finished in the green since.

The Dow jumped to a new high momentarily on Monday, but ended with the worst performance of the day. It slipped 0.62% (or nearly 185 points) to 29,861.55.

The NASDAQ gained 0.50% (or about 62 points) to 12440.04. With the market’s near-term so cloudy and unpredictable, money flowed into the safer sectors on Monday.

Stocks are coming off a frustrating week when all of the major indices were modestly lower. The S&P dipped by 1%, while the NASDAQ and Dow were off 0.7% and 0.6%, respectively.

The big problem last week was the lack of a stimulus package. The folks in Washington are still talking about it, and today we received a new proposal.

The interesting thing this time is that the relief may be split into two bills to make it easier to pass. Let’s see if it works…

Today's Portfolio Highlights:

Technology Innovators: The portfolio made an unconventional move on Monday by adding a company without a Zacks Rank. The new addition is C3.ai (AI), a leading enterprise AI software provider for accelerating digital transformation. It had a very successful IPO recently as investors are impressed with its three consecutive years of double-digit growth. Brian also appreciates AI’s subscription-based business model. Today’s sharp pullback provided a great opportunity to add a company with a prosperous future at a great price. By the way, the editor also sold Rapid7 (NASDAQ:RPD) after it slipped to a Zacks Rank #4 (Sell). The software security name still brought a more than 12% return to the portfolio in about two months. Read the full write-up for a lot more on today’s action. In other news, this service had the best performer of the day among all ZU names as Calix (NYSE:CALX) jumped 17.2%.

Healthcare Innovators: Biotech is hot again, so Kevin bought a couple names on Monday that might “go along for the ride” as the space sees more M&A moving forward. First of all, the editor added Meridian Bioscience (NASDAQ:VIVO), a provider of diagnostic test kits for gastrointestinal and respiratory infectious diseases. This Zacks Rank #1 (Strong Buy) is expected to grow sales 18% this year to $300 million. The other buy was Oncternal Therapeutics (ONCT), which develops oncology therapies for the treatment of cancers with critical unmet medical needs. However, Kevin warns that ONCT is HIGHLY SPECULATIVE with a couple of volatile catalysts that makes this position more unpredictable. Make sure to read Kevin’s commentary for more on today’s moves, especially his guidance on ONCT. In addition, Sangamo Therapeutics (SGMO) remained on the top movers list Monday with an advance of 6.5%.

Surprise Trader: It’s going to be a slow week for this portfolio, but Dave still started things off on Monday with a new addition. He added The Toro Company (NYSE:TTC), which is part of the highly-ranked tools – handheld industry (Top 10%). The company surprised by more than 46% last time. Now it has a positive Earnings ESP of 7.69% for the quarter coming before the bell on Wednesday, December 16. TTC was added today with a 12.5% allocation, while the editor also sold Beacon Roofing (BECN) for a 6.8% profit in just a little over a month. Read the full write-up for more.

Stocks Under $10: With restrictions being re-instated as coronavirus cases rise, Brian thought this was a good time to add a name like Waitr Holdings (NASDAQ:WTRH). It provides an online food ordering and delivery platform. This is a small company at the moment, but the editor likes that it’s profitable and that it reported double-digit surprises in the last two quarters. Plus, WTRH is a Zacks Rank #2 (Buy) with ties to Houston billionaire and CNBC contributor Tilman Fertitta. Brian added WTRH on Monday and has plans to buy again tomorrow. Read the full write-up for a lot more on this new addition. Meanwhile, Liquidity Services (NASDAQ:LQDT) was a top performer in the session by rising 10.7%.

Insider Trader: Defense spending is insulated from most of the negatives brought on by this pandemic. That’s fantastic news for Corporate Office Properties (NYSE:OFC). This REIT specializes in corporate office properties, but its mostly focused on government and defense IT buildings. It also has a data center shell business. Earlier this month, the CEO bought shares twice. Why? He probably saw a buying opportunity when the stock came off its November highs. Tracey sees a buying opportunity as well to pick up a recovery play for 2021. The editor added OFC on Monday with a 7% allocation, while also selling Sprouts (SFM). Read the full write-up for more.

Counterstrike: “Targets are targets,” says Jeremy. And even though Penn National Gaming (NASDAQ:PENN) could move higher from here, the editor decided it was close enough and sold this owner and manager of gaming and racing facilities on Monday for an approximately 27% return in just over a month! The editor would be happy to get back into this name on a pullback.

Black Box Trader: The portfolio replaced six names in this week's adjustment. The stocks that were sold today included:

• Flagstar Bancorp (NYSE:FBC, +2.2%)
• Resideo Technologies (NYSE:REZI, +1%)
• Sinclair Broadcast Group (NASDAQ:SBGI)
• Performance Food Group (PFGC)
• Big Lots (NYSE:BIG)
• Cardinal Health (NYSE:CAH)

The new buys that replaced these names were:

• Fidelity National Financial (NYSE:FNF)
• Steel Dynamics (NASDAQ:STLD)
• Tapestry (NYSE:TPR)
• Target (NYSE:TGT)
• TEGNA (NYSE:TGNA)
• UBS Group (UBS)

Read the Black Box Trader’s Guide to learn more about this computer-driven service.

Until Next Time,
Jim Giaquinto