5 Sectors Set To Boom On Coronavirus Vaccine Optimism: Top Picks

Wall Street has been on a stellar ride since hitting its bottom in late March. The S&P 500 and the Nasdaq Composite Index are continuing to hit new record highs. No doubt the slew of stimulus measures adopted by the government and the central bank is driving stocks higher but new developments in the treatment of coronavirus have added a fresh vigor in investments this week.

This is especially true as the Food and Drug Administration approved the use of convalescent plasma — the antibody-rich component of blood taken from recovered COVID-19 patients — as a treatment for serious coronavirus cases. At the same time, the Trump administration is seeking emergency use authorization for an experimental vaccine being developed by AstraZeneca (AZN - Free Report) and Oxford University ahead of the Nov 3 presidential election, according to the Financial Times. The rounds of news have led to expectations of a faster-than-expected economic rebound.

Additionally, a number of companies are working on a COVID-19 vaccine with Moderna Inc. (MRNA - Free Report) leading the way. The biotech company began its phase 3 clinical trial called the COVE (Coronavirus Efficacy) study of a coronavirus vaccine on Jul 27 in collaboration with the National Institute of Allergy and Infectious Diseases. Two of the four potential COVID-19 vaccines from Pfizer (PFE - Free Report) in collaboration with German biotech firm BioNTech have received fast track designation from the U.S. health agency. Meanwhile, Johnson & Johnson (JNJ - Free Report) is expected to begin phase 1 trial for its coronavirus vaccine by September 2020.

Merck (MRK - Free Report), Novavax (NVAX - Free Report), AstraZeneca (AZN - Free Report), Inovio Pharmaceuticals and Sanofi (SNY - Free Report) are among the others that have also joined the vaccine race.

Sectors Set to Bloom

While the prospect of a COVID-19 treatment will lead to broad-based gains, some investing areas are expected to benefit the most. From a sector look, cruise lines, airlines, hotel and casino operators, and travel and entertainment-booking companies will likely be the frontrunners as these were most beaten down by the pandemic. A vaccine could bolster the demand for air travel and leisure as people will not hesitate to go out of their homes or avoid direct contact.  

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