Good morning and welcome to the stock market today! For investors, an upcoming policy decision from the Federal Reserve is a key factor this morning. Earnings from tech giants like Microsoft (NASDAQ:MSFT) are also making a mark. So with all of this in mind, what will the stock market do today?
- The S&P 500 is up by 0.22%
- The Dow Jones Industrial Average is down by 0.45%
- The Nasdaq Composite is up by 0.14%
So what will the stock market do today? Here are the top three stories.
What Will the Stock Market Do Today? All About Vaccines.
Wall Street is once again focused on Covid-19 vaccines, but this time, many households may not be familiar with the key players.
The U.S. Food and Drug Administration has already granted emergency-use authorization to vaccines from Pfizer (NYSE:PFE), Moderna (NASDAQ:MRNA) and Johnson & Johnson (NYSE:JNJ). However, investors still have their eyes on smaller companies, in hopes that one can successfully navigate the regulatory pathway and deliver big for shareholders who got in at the start of the pandemic. But are those extra vaccines necessary?
Previously, one narrative on Wall Street was that it may be too late for a company like Novavax (NASDAQ:NVAX) or Vaxart (NASDAQ:VXRT) to make an impact on the U.S. As more and more Americans become fully vaccinated, the need for more doses from more companies could dwindle.
That narrative is changing, and investors are setting their sights on a new opportunity. Pressure is on to shore up Covid-19 vaccine supply in the U.S. and then to ensure equitable supply around the world. As President Joe Biden put it yesterday, the underdog vaccine maker Novavax may be the answer. The company has already been in talks with U.S. trade representatives and the World Trade Organization, and is hoping to share late-stage trial data sometime this quarter. Plus, Dr. Anthony Fauci said yesterday that its early results are very promising. India plans to begin stockpiling Novavax doses, and South Korea is also eyeing domestic production.
Keep a close eye on the NVAX stock story, and on other vaccine makers rushing to fill the gaps in global Covid-19 vaccine supply. You can read more about what is happening with Novavax here.
Stocks to Buy If the Housing Market Crashes
Is the housing market about to crash? And if it does, what should you do?
Right now, those are two very big questions that have Wall Street divided. The housing market has been on fire in recent months, prompting concerns of a bubble. Interest rates remain at near-zero levels, bringing new buyers to the market. Many millennials are coming of age as homebuyers, and Covid-19 also prompted many Americans to relocate. In other words, demand has been sky high.
Supply, in contrast, has not been able to keep up. Lumber and plastics shortages, a result of tree-killing diseases, a weather crisis in Texas and the pandemic, are cramping supply. Housing inventory has also remained low since the 2008 financial crisis. Competition from institutional buyers is also adding pressure to the market, and contributing to an all-time low in U.S. housing inventory.
To some on Wall Street, this situation is filled with red flags and signs of an oncoming housing market. To others, it is filled with upside catalysts and reasons to dive into housing stocks. Those who are bullish note that lending practices are stricter than in 2008, and that there are clear reasons for the supply-demand imbalances. As the team at Morning Brew puts it, it is more of an affordability crisis than an actual housing crisis.
But what if that housing crisis comes? InvestorPlace contributor Alex Sirois thinks it is time for investors to start getting a bit defensive. That means limiting exposure to anything housing-related and adding defensive names like American Water Works (NYSE:AWK) and Walmart (NYSE:WMT) to your portfolios. You can read his full list of stocks to buy here.
From Truck Drivers to Ketchup…
Investors should pay close attention: It’s not just the housing market facing a serious shortage. In fact, the list of shortages looking ready to impact consumers just keeps growing longer.
Take for instance a shortage in truck drivers. A variety of factors contribute to this shortage, including barriers to acquire necessary licenses. Also complicating matters is the independent contractor vs. employee debate — drivers work long hours as independent contractors and say they do not receive enough breaks or reimbursement for their expenses. Pandemic shutdowns also triggered supply-demand imbalances, leaving 20%-25% of available tank trucks out of use.
This truck driver shortage could cause a gas shortage that would in turn hit consumers. There simply may not be enough drivers to get gas to the gas stations in time.
What does this mean for investors? With the country focused on the great reopening story, it is important to keep an eye on all of these supply shortages, and the winners and losers. For consumers, it could mean that we end up in July and several key goods are facing critical shortages, cramping life in the new normal. Ketchup, gas, coffee, boba, maple syrup, chicken wings. The list seems never-ending.
For investors, this means looking for who wins, and adding those companies to your portfolio. We have already seen this work in the chip shortage. Those who bought into the semiconductor companies are profiting from record demand.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is the Editor of Today’s Market for InvestorPlace.com.