Traders work on the trading floor of the New York Stock Exchange.
US stock futures rose on Sunday evening as traders assessed strong market rotation that resulted in mixed weekly performance last week.
The Dow Jones Industrial Average futures rose 198 points, or 0.7%. S&P 500 futures traded 0.7% higher and Nasdaq 100 futures traded 0.9%.
The S&P 500 hit a record high on Friday, posting a one-week gain of 2.2%. The Dow rose more than 4% last week and briefly hit an intraday record last week. However, the Nasdaq Composite lagged 0.6%.
Those moves came as traders piled into seedy names at the expense of soaring growth stocks amid positive vaccine news. The iShares Russell 1000 Value (IWD) exchange traded fund was up 5.7% last week, while its growth counterpart, the iShares Russell 1000 Growth ETF (IMF), was down 1.2%.
Pfizer and BioNTech said last week that their coronavirus vaccine candidate was more than 90% effective in preventing Covid-19 participants in a late-stage study. The news raised hopes of an economic recovery and made value stocks like United Airlines and Carnival Corp more attractive. United and Carnival were up 12.4% and 15.9% respectively last week.
"Pfizer / BioNTech's announcement of an effective Covid-19 vaccine last week was so important that we almost forget that a US presidential election has just taken place," wrote TS Lombard analysts Steven Blitz and Andrea Andrea Cicione in a note.
"The vaccine turns a possibly lingering crisis into some kind of natural disaster (big shock, quick recovery)," they said. "Without an effective vaccine, the current EPS consensus expectation (pointing to a return to trend by the end of next year) would be optimistic, but one could actually be fulfilled."
However, the number of coronavirus cases is still rising, threatening the prospects for a rapid economic recovery.
According to the Johns Hopkins University, more than 11 million Covid-19 infections have been confirmed in the United States. Data from the COVID tracking project also showed that more than 68,500 people were hospitalized with the coronavirus in the United States.
However, Dan Russo, chief market strategist at Chaikin Analytics, believes the market can weather this recent surge in coronavirus cases.
"It seems that investors are more focused on vaccine news and willing to look beyond the short-term spike in some cases," he said in a post. "If this is a concern for investors, it will be reflected on the charts and risk management will take control."
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