3 Pharmacy Stocks That Should See A Boost From The COVID-19 Vaccine: CVS, Rite Aid, And Walgreens

NYSE: CVS | CVS Health Corporation  News, Ratings, and Charts

All three major indexes finished down after a week of increased volatility. We saw the market whipsaw back and forth over concerns of market disruption from retail traders targeting notable shorted stocks. In the midst of mixed economic reports, and mostly positive fourth-quarter earnings results, I remain focused on a potential stimulus package and a renewed spotlight on the vaccine front. 

The Biden administration has set its attention to getting as many people vaccinated as possible so that we can return to some sense of normal. I see this as a positive for pharmacies, as drug stores will be essential in administering the vaccine. That’s why I am recommending pharmacy stocks, such as CVS Health Corporation (CVS), Rite Aid Corporation (RAD), and Walgreens Boots Alliance, Inc. (WBA).

But first, let’s take a more in-depth look at how the market has performed over the past few days.

Market Commentary

Following relatively normal trading sessions on Monday and Tuesday, the market saw sharp losses on Wednesday as investors grew concerned over the Federal Open Market Committee’s January monetary policy decision. The Federal Reserve emphasized that the pace of the economic recovery had slowed in recent months.

The indexes bounced back on Thursday, rebounding from their worst one-day decline since October. Investors were focused on corporate earnings results from the largest publicly traded companies, while stocks that were previously driven up by speculative trading finished the day lower. The market sold off again Friday due to concerns over volatility and speculative trading in highly shorted stocks.

The market had been trending higher since November, primarily due to positive news on the vaccine front. This was a boon for cyclical stocks in the energy, financials, and materials sectors. Since the beginning of the earnings season, though, these sectors have been underperforming, while tech stocks have gained strength.

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