More good news about a possible COVID-19 vaccine that looks promising. the S&P 500 (SNPINDEX: ^ SPX) collected 29 points, or just under 1%, on July 15, after publishing the results of a phase 1 study of Modern‘s (NASDAQ: MRNA) COVID-19 vaccine candidate. The results were promising, showing that all 45 participants produced neutralizing antibodies.
Investors took the news, and rushed it, straight to some of the S&P’s leading stocks, including cruise lines, airlines, hotel and casino operators, and travel and entertainment booking companies. Some 20 incredible companies in the S&P 500 earned more than 9% on the day, with a dozen of them in the travel, entertainment and hospitality business.
Image source: Getty Images.
Cruise lines rise the tide, airlines gain altitude
The three stocks with the highest gain in the index today were the cruise lines Royal Caribbean (NYSE: RCL), Norwegian Cruise Line Holdings (NYSE: NCLH)and Carnival Corp (NYSE: CCL)They all rose 16% or more at the close of the market and rose more in late-hours trading. It has been an incredibly volatile period for cruise line investors, with the industry hit still working on plans to return to the high seas.
Today, like every other day that cruise line stocks have been seen to move large in recent months, it is based on speculation. The big three cruise operators will not return to the water before September and even then they will travel with far fewer passengers.
All five airlines in the S&P 500 earned at least 7.5% today:
| Airline stock | Price change on 07/15/20 |
|---|---|
| American Airlines Group (NASDAQ: AAL) | 16.2% |
| United airlines (NASDAQ: UAL) | 14.6% |
| Delta airlines (NYSE: DAL) | 9.5% |
| Alaska Air (NYSE: ALK) | 9.2% |
| Southwest Airlines (NYSE: LUV) | 7.5% |
Source: fidelity
Today’s profits for these airlines are due to the same thing that moves the stocks of cruise lines. Hope for an effective vaccine to help humanity go beyond the deadly pandemic is giving investors visions of skies filled with passenger-filled planes once again.
Although they are still in bad shape, the airlines are in a relatively better position than their brothers in the water, as air travel has recovered somewhat in recent months. However, even with the resumption of air travel, at least domestic travel, these operators still see much lower volume than half of last year’s levels.
Delta’s earnings yesterday are a good reminder of how bad things are: The company still has more than 70% of its ground flights and burned an average of $ 27 million in cash. per day in June. Southwest also says it is likely to be forced to lay off employees for the first time in the company’s history, as it appears that air travel will take longer than expected to fully recover.
However, investors are betting on an early-stage vaccine as a sign of hope that things will improve sooner rather than later.
Hotels, casinos and booking websites also show big profits
MGM Resorts International (NYSE: MGM), Live Nation Entertainment (NYSE: LYV), Hilton Worldwide Holdings (NYSE: HLT), Host Hotels & Resorts (NYSE: HST), Expedia group (NASDAQ: EXPE)and Wynn Resorts (NASDAQ: WYNN) They all won between 9.4% and 13% today, with the same positive news about the Moderna vaccine candidate. Like its travel-focused siblings, hotels, casinos, and reservation companies and entertainment events have struggled as the coronavirus pandemic has halted entertainment and business travel.
Earnings update: Goldman deposits big quarter, UnitedHealth Group doubles earnings
Goldman Sachs (NYSE: GS) and UnitedHealth Group (NYSE: UNH) They were two of the most notable companies in the S&P 500 that reported earnings today, and both had results that exceeded expectations.
Goldman reported a huge 41% increase in revenue and earnings of $ 6.26 per share, which exceeded expectations by more than 60% in very strong investment banking and commercial activity. In short, Goldman’s investment banking approach is paying off in the market turmoil.
To UnitedHealth, it may seem contradictory for a health insurer’s earnings to rise during a global health pandemic. And while COVID-19 had a negative impact on your business, healthcare that was deferred in the quarter reduced your expenses, putting more of the premiums you earned in the bottom line.
Investors should keep in mind that those gains will probably not last forever; deferred medical treatments will reduce future earnings, and a deep recession could affect premiums as more people lose employer-based insurance as unemployment increases. Furthermore, the sharp increase in COVID-19 cases is likely to lead to more expenses for the mass health insurer.
Notable: Ford Bronco was well received, Hanesbrands and Gap are big on analyst updates
Ford engine company (NYSE: F) He has been desperate for some good news in what has turned out to be a brutal year. Today appears to have accomplished that, as investors feel much better about the company following Monday night’s reveal of its long-awaited Bronco SUV. The new Bronco will come in three styles and appears to be a serious new entry to the valuable SUV sports space. Investors like the prospect of the Bronco enough to vote the Blue Oval stock price over 6% today.
Two of the biggest winners of the S&P 500 today were Hanesbrands (NYSE: HBI) and Gap (NYSE: GPS), up to 14% and 13%, respectively. The two clothing manufacturers and retail companies garnered bullish endorsement from independent Wall Street analysts today, with Raymond James updating Hanesbrands to a “strong buy” and an RBC analyst driving Gap stocks on strong prospects of its partnership with Kanye. West.
Looking to the future: fasten your seatbelt
So far, this week has turned out well for investors, with the S&P delivering two positive days, even with mixed gains so far, and the COVID-19 cases and death toll on the rise. Needless to say, it will be impossible to accurately predict what will happen to stocks over the next week, month, or even year. The fact is that today’s big day for many populations was tied to the prospects for a vaccine that could still take more than a year to fully complete clinical trials.
Of course, investors are betting on an emergency use authorization that will come sooner, but there is much at stake for a vaccine or more effective treatments to finally help us to leave behind the COVID-19 pandemic and the brutal number of human victims. .
