Back to Reality… A second consecutive “Vaccine Monday” made the proverbial “light at the end of the tunnel” that much brighter for 2021, but investors are following up another Rotation burst with a more wary assessment of the more immediate obstacles blocking that tunnel exit. In addition to the daily list of states announcing new virus curbs, and an October Retail Sales print that showed slowing growth, Republican senators reminded last night they remain opposed to any large scale stimulus. That caused enough concern to spark a bit of an unwind to yesterday’s rotation, and the usual 3 Value suspects Banks, Energy, and Autos were the worst performers shortly after the open. However, sentiment has evened out as the day’s progressed (VLUE was underperforming MTUM by 1.9% at 10am, but is now only -0.6% relative) and indices are attempting to fight their way back to their unchanged marks. Now Healthcare is at the bottom of the pile, with CVS (-8.9%) and other pharmacy names (WBA -9%, RAD -16%, GDRX -20%) feeling sick about Amazon’s (AMZN +0.7%) foray into the space, and Boston Scientific (BSX -8.9%) falling after initiating a recall of one of its heart valves. Retail and Food Retail are also red following a poor reception for earnings beats from Home Depot (HD -3.0%) and Walmart (WMT -0.6%) [another sign winners may be topped out?]. More defensives sectors like Household Goods and Real Estate are faring best today, along with Apparel stocks which are benefitting from broker upgrades.
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