Travel & Leisure Celebrate the Coming Vaccine

Another big day for bulls in the stock market Wednesday was perpetuated by progress among pharma companies in developing a vaccine for the COVID-19 coronavirus. Although it wasn’t the pharma companies engaged in “Operation Warp Speed” who were the big winners today — it was those stocks that look to benefit from a genuine full reopening in the U.S. economy, particularly in the Travel & Leisure space.

Dr. Anthony Fauci, the U.S.’s foremost authority on infectious diseases, today said he looks for a COVID vaccine by year’s end. This would be on the early side of the range for most analysts, but is very much what the market wanted to hear. Today’s biggest movers to the upside included Royal Caribbean RCL, +21%, Norwegian Cruise Lines NCLH, +20%, American Airlines AAL, +16% and United UAL, +14%. Boeing BA gained 4.4% today, helping lead the Dow higher for the 4th straight day.

In all, gains across the board: the small-cap Russell 2000 gained the most, up 3.5% to 1478 points, followed by the S&P 500 up 0.91% to 3226, the Dow at +0.85% to 26,870 and the Nasdaq +0.59% to 10,550. This is the second-straight day in the green for the S&P and Nasdaq indexes.

The U.S. Beige Book for July 2020 came out this afternoon, with an acknowledgement of improvements in various sectors of the economy, employment, etc. while also providing some caveats. The Fed’s summary of economic conditions saw higher layoffs in Minnesota and Wisconsin of both the temporary and permanent variety, with wage cuts and pay freezes throughout regions in the country. Business recipients of the Paycheck Protection Program (PPP) actively look for ways to keep from implementing further layoffs going forward.

The Grand Reopening is hitting some headwinds currently, with California quickly executing a turnaround to re-closing businesses as its coronavirus infections climb toward unsustainable levels. We already see states like Arizona struggling to find ICU beds to accommodate the heavy influx of COVID patients, as the state joins other hot spots like Texas, Florida and Georgia. This, while earlier coronavirus centers in the Northeast have reduced their daily cases count and take the next steps toward opening their economies in New York, New Jersey and Connecticut.

Tomorrow morning, we will get the latest data on Initial and Continuing Jobless Claims. Last week, another 1.3 million Americans filed for unemployment for the first time, while Continuing Claims remain over 18 million. We’re a far cry from pre-pandemic levels in the U.S. labor market, as today’s Beige Book points out. That said, we are riding a 14-week streak of lower Initial Claims, and investors are hopeful we will make it 15 Thursday morning.

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