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5 ETFs Up Double Digits in a Day on Vaccine Optimism

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Wall Street soared on Nov 9 on news that a Pfizer (PFE - Free Report) and BioNTech (BNTX - Free Report) vaccine candidate was more than 90% effective in avoiding COVID-19 in its clinical trial. Before this, the global markets were rejoicing in the possibility of a divided congress in the United States.

A divided congress or balanced government means status quo, “which prevents big changes to health care and the tax code," said Darrell Cronk, president of Wells Fargo Investment Institute, as quoted on nbcnews.com. Some of Biden’s proposed policies (like tax hike) may not see an easy passage as chances of a balanced government are high.

As a result, markets have been rallying in recent sessions. Then, the vaccine news instilled more optimism in the markets and made coronavirus laggards the real leaders on Nov 9. SPDR S&P 500 ETF Trust (SPY), SPDR Dow Jones Industrial Average ETF Trust (DIA) and iShares Russell 2000 ETF (IWM) added 1.27%, 3.01%, 3.71%, respectively, while the tech-heavy virus-winner Invesco QQQ Trust (QQQ) lost about 2.04% on the day.

Against this backdrop, below we highlight a few ETFs that gained double digits on Nov 9 mainly on vaccine hopes.

Oil Services Vaneck ETF (OIH - Free Report) – Up 18.9%

The coronavirus-led global slowdown weighed on oil demand. Mounting concerns over a second wave of coronavirus cases have threatened demand further in recent sessions. This is especially true as the major parts of the Europe like Germany, France and U.K. are under lockdown now. Citi recently slashed its 2021 Brent and West Texas Intermediate crude price outlook by $5 to $54 and $49, respectively. In such a scenario, the vaccine news has every reason to boost the energy sector.

Etfmg Travel Tech ETF (AWAY - Free Report) – Up 18.3%

Coronavirus crippled global travel demand badly. Since the fund is made of stocks that are in travel bookings and reservations, ride sharing & hailing, travel price comparison and travel advice, the pandemic has hit the fund hard. The fund is off 23.1% this year.          

KBW Regional Banking Invesco ETF KBWR) – Up 16.4%

Banking stocks have been rather beaten down in the past few months as fears of higher defaults at the household and corporate levels hit the space hard due to economic slowdown. Despite yesterday’s gains, the banking ETF KBWR is down 20.9% this year. So, banking stocks are offering value now and have found room for growth.  

US Global Jets ETF (JETS - Free Report) – Up 16.1%

Airline stocks (one of the main victims of the coronavirus crisis as it is off 34.6% this year) have been trying to bounce back on a rebound in travel demand.  This is especially true as the number of people going through airport security screening checkpoints has improved in the August-September period. Better consumer confidence and some federal aid also boosted the airlines ETF in the past six months. However, the recent rise in virus cases and no further stimulus once again started to bother the fund as it lost 1.2% past month. Vaccine news offered a fresh lease of hope to the fund.

Invesco S&P 500 High Beta ETF (SPHB - Free Report) – Up 11.62%

Vaccine optimism (which indicates return to economic normalcy) and a divided congress (which indicates the likely status quo on policy matters) mean a steady rally in stocks. Both factors fueled Wall Street in recent sessions and will likely to do so in the coming days.

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