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The arrival of a potential Covid-19 vaccine could have "profound expectations" for stocks and sectors that could see significant upside for even small steps toward normal, Jefferies told clients in a note.
The hopeful news Monday about the Pfizer-BioNTech vaccine candidate created a sharp rotation in the stock market, as investors poured money into the companies that would benefit from a return to normal. Jefferies said there are "stocks beyond the obvious" where Wall Street estimates do not account for even small improvements from a vaccine.
"Though questions remain on availability, duration of protection, and true efficacy in a world without precautions, the move today on a return to normalcy highlights how dislocated expectations remain," Monday's note said.