Profit Pregame

Don’t Put A Lot of Money Into That New Vaccine-Here’s Why

Another positive breakthrough…

Moderna has announced positive numbers for their Coronavirus vaccine…

What’s happening?

Well, it will probably come as no surprise that I’m talking about the vaccine developments today – but we must dig into this announcement as this is the number one driving force in the market.

U.S. stocks rose sharply after Moderna revealed that its experimental Covid-19 vaccine is highly effective. And the market welcomed the good news with open arms, as the market exploded, skyrocketing towards new highs.

Moderna said in a statement that the first interim analysis of Phase three trial results showed its vaccine candidate was 94.5% effective against covid-19. This announcement followed on the heels of Pfizer’s positive vaccine announcement just last week – pumping even more hope into the market.

Where’s the money?

Since the beginning of the pandemic, there have been dozens of vaccines in the works, all racing to be the first to bring something to the table. But an important question lingered – would a vaccine even be effective against the Coronavirus? These breakthroughs by Moderna and Pfizer allow a little breathing room, though, as they suggest that vaccines may be the answer we’ve been looking for.

And as the race to find the vaccine continues, it seems investors believe they finally see the light at the end of the tunnel. And the sectors that we have seen being beaten down over the last few months are finally seeing momentum – including airline and cruise company stocks.

But before you chase the rally with the rest of them, there’s one thing I want you to know…

How do I get some?

A positive development in a vaccine is undoubtedly something to celebrate – but you have to ask yourself, is it something to gamble your money on? When it comes to possible breakthroughs, I would advise treading carefully, no matter how high the market runs.

Because here’s the thing, while it is good news, I have a feeling it’s being factored into investment decisions much too soon. And Pfizer’s announcement last week is the perfect example. After seeing the market move higher on the 90% success vaccine announcement – the market bottomed out shortly after – no doubt hurting those who chased the vaccine hysteria.

So, while it might be too soon to get short in this market, I’m going to be keeping a close eye on what happens next. With that said, if you’re looking to invest in the progress of a breakthrough, I wouldn’t be chaseing Moderna. And in reality, I still like Pfizer more than Moderna. So, I’d be looking to get in this stock today, given the sell off we are currently seeing.

The Best Way to Play the Vaccine Race

Regardless of the optimism surrounding Pfizer’s most recent vaccine announcements, those who blindly chased the profits ended up empty-handed, as I feared they might.

But just because I’m recommending a more patient approach, that doesn’t mean I’m not still watching for ways to play this news for profits.

In fact, my colleague Michael Robinson let me in on exactly how he plans to do this, and I want you to listen to his presentation right here.

In the spotlight: This bank is looking to be the top dog…

Despite the struggling economy, thanks to the Coronavirus, one company focuses on becoming the best and most prominent in their industry. PNC is a Pittsburgh-based lender, and they recently announced that they would be acquiring the American unit of Spanish financial group BBVA for $11.6 billion.

The deal is the second-biggest banking sector merger, coming in behind the $66 billion agreement in 2019 between BB&T and SunTrust to create Truist (TFC) since the global financial crisis. And it means big things for PNC as well…

Once this deal closes, PNC will have more than $560 billion in assets. This makes the company the fifth largest retail bank in America – coming in behind JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C). But the company isn’t done just yet.

BBVA’s U.S. subsidiary runs an impressive business boasting over $100 billion in assets. And it also spans a wide range of states, with 630 branches spread across Texas, Alabama, Arizona, California, Florida, Colorado, and New Mexico. PNC explained that this acquisition “significantly accelerates” its national expansion strategy, and it will leave it with a presence in 20 of the 30 largest markets across the United States.

With that said, I’ll be keeping a close eye on this one as it continues to grow. And I’ll be sure to keep you updated every step of the way.

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