Promising news on the COVID-19 vaccine front this week from Pfizer and partner BioNTech isn’t only bullish for humanity, but probably also for a stock market that has soared after the development.
That’s the good word from veteran strategist Jeffrey Kleintop.
Schwab’s chief global investment strategist told Yahoo Finance Live that the vaccine likely marks the start of a new bull market in equities. “It’s key developments like the vaccine announcement that we’ll look back and say that was a key element that started this rotation into the new cycle,” he said.
Mr. Market seems to be on board with that logic.
The Dow Jones Industrial Average and S&P 500 have popped 4% and 2.5%, respectively, so far this week. Gains come in the wake of a new study made public Monday that showed a vaccine developed by Pfizer and BioNTech SE was found to be more than 90% effective in the first 94 subjects infected by COVID-19 and had at a minimum one symptom.
The vaccine news has swept bullishness across the market, leading to healthy gains in economically sensitive sectors such as energy, cruise lines and the small-cap Russell 2000 Index. Vaccine bullishness has also swept into the halls of investment banks — all of which look to be keen on the commencement of a new bull market.
Goldman’s chief strategist David Kostin hiked his year-end S&P 500 price target by 4% to 3,700 on Wednesday, reflecting a view we get one COVID-19 vaccine approved by the FDA before year end. The strategist projects the S&P 500 rising 16% to 4,300 by the end of 2021 and recommends investors buy deep value stocks. He thinks the S&P 500 will reach 4,600 by the conclusion of 2022.
Meanwhile, JPMorgan said this week it sees the S&P 500 finishing the year above 3,600 and then closing at 4,500 or so by the end of 2021.
“Obviously the vaccine announcement on Monday was a huge boost really to the credit markets and the banks rallied significantly. So you are seeing a lot of ingredients that are bullish for the markets,” Stifel CEO Ron Kruszewski told Yahoo Finance Live.