Last month saw the Reddit army of retail traders blow Wall Street and its hedge funds out of the
The S&P 500 and Dow had a successful start of the week on Monday due to the U.S. reopening its economy over the past week, as COVID-19 cases decline. Restrictions have been loosening across states; while the mask mandate remains in force all over the country, some states have lifted restrictions on outdoor dining and entertainment facilities and have allowed citizens to move more freely around the country.
S&P sectors that are economy-sensitive such as energy, manufacturing, and consumer staples, outperformed the usual leaders – tech and communications stocks.
The biggest gainer was oil giant Baker Hughes that rose by 8%. Retailers Gap and Foot Locker also saw the light at the end of the COVID-19 tunnel with 7.1% and 4.1% gains, respectively.
“All of those names that are having outsized gain today are as a result of economic reopening optimism, and people getting out of the house spending money on things,” said managing director of equity trading at Wedbush Securities, Michael James.
Trading volume on U.S. exchanges rose from 9.86 billion to 10.29 billion shares during an average full trading session over the last 20 days.
“We’ve seen a slight change in the pace of value stocks outperforming growth stocks year-to-date,” said managing director at UBS Private Wealth Management, Rod von Lipsey.
At the same time, Nasdaq found itself declining, following a few successful past weeks. Tech giants like Amazon and Microsoft declined as investors focused on different sectors. The impact of global news remains imperative on the stock market, particularly during the pandemic.
The two companies that seemed to most affect the index’s performance was the pharmaceutical company Novavax and, to everyone’s surprise, Tesla.
Supply Chain Troubles and Delays
Novavax received some negative news regarding their vaccine against COVID-19, NVX-CoV2373. The company’s production timeline does not coincide with investors’ wishes. Novavax has spent months developing its vaccine and then working on a deal with the European Union to export it for vaccination efforts.
The company announced that it wouldn’t manage to deliver the 200 million doses agreed on until 2022. Investors were largely disappointed with this announcement, despite the fact that the company announced its plans on starting an expansion of its phase 3 trial to vaccinate those between 12 and 17. Currently, youths under the age of 16 cannot be vaccinated, even under Emergency Use Authorization. The company’s shares dropped by 16% following the announcement.
Tesla is in a similar boat. While the company had plans to boost production in the coming future and has been focused on expanding its capacity, this has proven to not be easy. The company’s shares fell by over 4%.
Unfortunately, Tesla’s factory in Berlin announced that it will not be able to open its facilities until mid-July. The plant was meant to assist the company in its plans to expand by 50%.
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