Shares of companies that have struggled under lockdowns surged, with the S&P 500 index closing just short of a record
Value stocks notched their best one-day performance against their growth-focused peers ever, by one measure, after Monday’s news of an effective vaccine against the coronavirus sent investors into shares of companies expected to benefit the most from an economic recovery.
Pfizer Inc said on Monday its experimental COVID-19 vaccine was more than 90% effective, a potentially major victory in the fight against a pandemic that has killed more than a million people, hammered the world’s economy and upended daily life.
Shares of companies that have struggled for months under coronavirus-fuelled lockdowns surged, with the S&P 500 index closing just shy of a record, and some investors believe the moves may have further to run if the vaccine news continues to be favourable.
Value stocks tend to be companies that are more sensitive to the economy’s fluctuations.
Monday’s percentage gain for the Russell 1000 Value Index exceeded that of the Russell 1000 Growth Index by 7.48%, the largest margin in history, driven by bets that the prospects of a working vaccine some time in the next few months could help industries that have suffered under coronavirus lockdowns and travel restrictions.
Sectors such as energy, travel and financials, which were among the hardest hit by lockdowns aimed at curbing the virus, were some of the biggest percentage gainers on Monday, while technology stocks and other “stay-at-home” stocks made smaller gains or declined.
Monday’s action stood in contrast to the performance of growth against value over the last several years, when big technology and communications companies have soared while energy and other value sectors have relatively subdued.
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