Good morning and welcome to the stock market today! Before you start focusing on rising Dogecoin (CCC:DOGE-USD) prices, make sure you are caught up on all things Wall Street. So what will the stock market do today?
- The S&P 500 is down 0.93%
- The Dow Jones Industrial Average is down 0.6%
- The Nasdaq Composite is down 1.83%
So what else will the stock market do today? Here are the top three stories.
What Will the Stock Market Do Today? Talk Vaccines.
Pfizer (NYSE:PFE) is kicking off Tuesday with some big news. The Covid-19 vaccine maker says that it will file for full approval with the U.S. Food and Drug Administration later this month. Its two-dose vaccine, which is currently under an emergency-use authorization, brought in $3.5 billion in sales during the first quarter. Additionally, its revenue and earnings beat analyst expectations.
What does this mean? One of the biggest changes if Pfizer receives full FDA approval is that it will be able to market its vaccine directly to consumers. It will also be able to change the pricing, and gives the vaccine regulatory protection even beyond the pandemic.
Importantly, Pfizer has some other Covid-19 plans in the works. The company hopes to file for a third vaccine booster shot over the summer, and it is eyeing antiviral treatments. The FDA also appears ready to expand the use of Pfizer to adolescents 12 to 15 years old, perhaps as soon as next week.
One more thing to watch: Underdog vaccine maker Novavax (NASDAQ:NVAX) has had a rough week. Although the company confirmed it will start shipping doses to the European Union and expanding its Phase 3 trials to include adolescents, NVAX stock has been selling off. It appears supply chain concerns and regulatory delays are weighing on Novavax now.
All About Oil
At the beginning of the pandemic, oil was a star in a really terrible show.
Demand was down. Manufacturing activity was down. Travel was down. As a result, we saw a major supply-demand imbalance emerge. Then, Saudi Arabia and Russia came to blows in an oil price war that saw futures for crude oil turn negative.
Now, oil is back on the sidelines, but that does not mean investors should stop paying attention. In fact, oil prices are rising on Tuesday as Wall Street eyes several bullish catalysts.
To start, international travel restrictions are gradually loosening. Just yesterday, the European Union unveiled a plan that would allow vaccinated tourists to enter its borders. Just in time for the summer travel season, this would give the European economy a big jolt. That would impact manufacturing activity, driving, and overall travel demand. In fact, Goldman Sachs analysts say that the coming jump in demand for oil could be the largest ever, clocking in at 5.2 million barrels per day over the next six months.
With West Texas Intermediate (WTI) trading for just over $66 a barrel and Brent trading for over $68 a barrel, Goldman still sees upside. Analysts have set a summer 2021 price target of $80 for oil prices.
Lastly, earnings are showing real signs of a big recovery in the energy sector. As Alex Kimani wrote, the majority of energy companies have beat earnings estimates. At least 82% have surpassed revenue expectations. With all this in mind, energy companies are raising dividends and upping their forecasts. Companies like Marathon Oil (NYSE:MRO), Kinder Morgan (NYSE:KMI) and Chevron (NYSE:CVX) are all on watch.
Skincare, Winged Eyeliner and the Great Reopening
Estee Lauder (NYSE:EL) delivered its quarterly report on Monday, and revenue was up 16% to $3.8 billion. Earnings per share were $1.24, a significant year-over-year increase from a loss of 2 cents. However, in the aftermath of the report, EL stock was down.
The reason why can be found in the breakdown of its sales. Its skincare segment was up 31%, while perfume sales were up 30%. However, makeup sales down 11% year over year.
What should investors take away from this? To start, Estee Lauder CEO Fabrizio Freda is not worried, looking at sales growth in China and among travelers. Freda also believes that makeup demand will grow toward the end of 2021.
The second takeaway is that the skincare vs. makeup demand is illustrative of a larger Covid-19 story. What consumer behaviors will return to normal, and which spending habits will remain a thing of the past? Will we remain content with skincare spending, focusing on curing that evil mask-ne? Or will we dive back into lipsticks, winged eyeliners and contour kits?
On one hand, we already know that retailers like Levi (NYSE:LEVI) are seeing a return to normal. Although sweatpants stole the show during the pandemic, pants with zippers are now outselling pants with drawstring waists. On the other hand, it seems that our commutes will be forever changed.
While Estee Lauder certainly could see makeup demand surge later this year, keep this story in mind. Changing behaviors mean changing stock picks.
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 with InvestorPlace.com.