Markets

Vaccine Hopes Boost These Sectors & ETFs

U.S. biotech company Moderna Inc. MRNA is firing on all cylinders as its clinical trials for experimental coronavirus vaccine are showing success. Per the latest news, Moderna’s vaccine for COVID-19 showed it was safe and triggered immune responses in all 45 healthy volunteers in an ongoing early-stage study. Moderna had conducted two tests in May and will begin phase 3 tests with 30,000 volunteers on Jul 27. 

Notable, Moderna shares have gained a whopping 310% this year, winning a place on the Nasdaq-100 with its sheer success. Moderna gained about 7% in the key trading session on Jul 15 (read: Expect Further Rally in Nasdaq-100 ETFs as Moderna Joins).

Vaccine hopes bolstered risk-on trade sentiments and boosted stocks and sectors that are the direct beneficiaries of economic reopening. Meanwhile, J.P. Morgan (JPM) and Goldman Sachs (GS) have come up with upbeat earnings results, giving another reason for investors to rejoice. Apple has also gained as it won EU court case over $15 billion in claimed taxes.

Against this backdrop, below we highlight the winning sectors and the related ETFs.

Healthcare

No wonder, Moderna is a winner, having gained more than 9% on Jul 15. Plus, Genetic Technologies GENE has filed a provisional patent for its COVID-19 Severity Risk Test with the Patent Office in Australia. Shares of GENE gained more than 150% on Jul 15.

Moderna-heavy ETFs like Renaissance IPO ETF (IPO) (up about 1.2%), ETFMG Treatments Testing and Advancements ETF (GERM) (up 0.9%) have added solid gains. Also, Invesco S&P SmallCap Health Care ETF PSCH advanced about 4.6% on the day (read: IPO ETFs Breeze Past S&P 500 in 1H: What Next?).

Airlines

The sector has been among the hardest hit by the coronavirus pandemic. However, hopes for economic normalization boosted the space. As a result, American Airlines Group Inc. (AAL) (up more than 16%) was another big winner on Jul 15. Vaccine hopes boosted the beleaguered sector. Airlines ETF U.S. Global Jets ETF JETS advanced about 7.8% on Jul 15.

Leisure & Entertainment

Previous trading sessions also recorded a rally in travel & leisure stocks. The U.S. Beige Book for July 2020 shows improvement in various sectors of the economy, employment. Though there is still pressure on the jobs market, business recipients of the Paycheck Protection Program (PPP) are looking for ways to keep implementing further layoffs going forward.

As a result, the battered leisure stocks started togain on vaccine hopes.Royal Caribbean Cruises Ltd. (RCL) gained 21.2% on Jul 15 while Invesco Dynamic Leisure and Entertainment ETF PEJ added 5.4% on the day.

Banking

Banking stocks gained on Jul 15 on the dual news of economic reopening and upbeat earnings from some bellwethers like J.P. Morgan and Goldman Sachs. Moreover, the latest easing of Volcker rule is another plus for the banking stock. SPDR S&P Regional Banking ETF KRE added about 6% on Jul 15.

Mortgage REIT

Mortgage REITs (mREITS) provide financing for income-producing real estate by purchasing or originating mortgages and mortgage-backed securities (MBS) and earning income from the interest on these investments. Smooth economic reopening means higher demand for real estate, which in turn should benefit mREITs.

Moreover, prevailing low interest rates is a plus for the sector. Mortgage rates are prevailing at the record low levels. As a result, mortgage volume in the housing sector is likely to pick up in the coming days. VanEck Vectors Mortgage REIT Income ETF (MORT) added 5.1% on Jul 15.

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Moderna, Inc. (MRNA): Free Stock Analysis Report

Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report

VanEck Vectors Mortgage REIT Income ETF (MORT): ETF Research Reports

U.S. Global Jets ETF (JETS): ETF Research Reports

Invesco Dynamic Leisure and Entertainment ETF (PEJ): ETF Research Reports

Invesco SP SmallCap Health Care ETF (PSCH): ETF Research Reports

SPDR SP Regional Banking ETF (KRE): ETF Research Reports

Genetic Technologies Ltd (GENE): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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