The stock market hates uncertainty, and it would be hard to imagine anything more uncertain than a presidential election during a raging pandemic. So Saturday’s declaration of Joe Biden as the winner of the hotly contested U.S. presidential race and then Monday’s announcement by Pfizer (NYSE: PFE) that its COVID-19 vaccine is more than 90% effective and nearing mass distribution rocked the market -- in a good way.
At midmorning, the Dow Jones Industrial Average and the S&P 500 had surged 3.7% and 2.7%, respectively, setting new intraday records.
The vaccine announcement from Pfizer and its German partner, BioNTech SE (NASDAQ: BNTX), came out at 6:45 a.m. Eastern today -- just hours before Biden’s new coronavirus task force was set to begin its work.
A great day for science, humanity, and some REITs
In their joint press release, Pfizer CEO Dr. Albert Bourla said, “Today is a great day for science and humanity.”
It’s a great day for a lot of real estate stocks, too, especially those in some sectors especially hard-hit by the COVID-19 plague on the economy. Resorts operator Ryman Hospitality Properties (NYSE: RHP), for instance, was up almost 23% at 11:30 a.m., and Big Apple office Empire State Realty Trust (NYSE: ESRT) was up about 24%.
Some non-real estate investment trust (REIT) real estate-related stocks also were rallying, such as residential-focused RE/MAX Holdings (NYSE: RMAX) up nearly 8% midmorning. Commercial real estate giant Jones Lang LaSalle (NYSE: JLL) was up nearly 20%, and Marriott International (NASDAQ: MAR) was up nearly 11%.
Not all stocks in the sector were rallying, though. D.R. Horton (NYSE: DHI), the nation’s largest homebuilder, was down about 4% midmorning, for instance, while Zillow Group (NASDAQ: ZG) was off about 9%.
Work-from-home stocks like Slack Technologies (NYSE: WORK) and Zoom Video Communications (NASDAQ: ZM) were also down, the latter especially getting a haircut at 13% around 11:30 a.m. ET.
Temporary momentum for long-term investments?
The market’s reaction today seems to be reflecting the momentous events of the past 48 hours or so, of course, and only time will tell how much momentum the winners will have pushing them higher and today’s losers will have holding them back.
For instance, there seems to be little reason to believe Zoom calls are going away soon. But then again, the demand may not be growing as much. That depends on how much return to the office we actually see, of course.
Plus, it seems unlikely housing demand will start falling because a vaccine has arrived and there’s a new resident in the White House, so it may be more of a blip today than signs of a bust for strong companies like D.R. Horton.
The Millionacres bottom line
But for long-term investments, now might be the time to look again at a lot of those issues that have been beaten down badly but are solid operations in sectors that seem poised for a sustained recovery. And some real estate stocks, especially REITs, could make for some rich value mining, even while the prospecting sluice is running full. Or, perhaps, especially now.