Five Rising Sectors to Put You Ahead of the Crowd Before 2021

Since Pfizer and Moderna released their COVID-19 vaccine news, the S&P 500 has risen over 3%, hitting an all-time closing high for this bellwether index.

Moderna started the week strong, making an announcement on Monday that their vaccine has a 94.5% efficacy rate.

Then hot off the press this morning, Pfizer announced that their vaccine also has a 95% efficacy rate, it passed phase three of trials, and the company is applying for approval from global authorities within the next couple of days.

This news has stock futures up heading into Wednesday morning, and there’s no doubt in my mind that this rally won’t continue as more news is released.

Projected $353 BILLION in 18 months: A massive wave of capital is heading toward five specific companies. [Details inside.]

We are seeing a race to the finish line, folks.

With expedited FDA approvals expected, it is conceivable that these vaccines will be available to the general population in Q1 of 2021.

The market is rising due to this long-anticipated news, and there are a handful of sectors that will lead the charge through the rest of the year and into 2021… and they have no place to go but up.

Here are the top five sectors – and the top stocks in these sectors – to invest in during this vaccine-inspired market rally…

These Sectors will Lead the Market Rally through the New Year

After a year of major sectors taking massive hits due to the COVID-19-related regulations and shut-downs, there is no room to go but up.

There are some obvious beneficiaries to this vaccine news… and some that might even come as a surprise.

Here are five sectors that have already responded positively – and they’re expected to continuing doing so into the new year. These are the top five sectors to watch right now…

Energy

The sector hardest hit by COVID-19 has, without a doubt, been energy. The energy sector is down 39.86% year-to-date. As the world gets back to normal, energy consumption will return to levels that we’ve seen in the past – and likely higher.

The recent vaccine news has propped up the sector as investors’ enthusiasm for energy stocks returns. I think this sector has huge growth potential in the coming months because people will want to travel – whether that be by car or plane – once it is safe to do so.


The Select Sector SPDR Trust Energy ETF (NYSE: XLE) has been channeling since June and is showing signs of life with recent pops up on the recent COVID-19 vaccine news.

This sector is rich with great companies, but I want to look at two of the top-performing stocks in this sector over the past three months – Baker Hughes Company (NYSE: BKR) and Devon Energy Corporation (NYSE: DVN). BKR is an oil and gas company that is associated with General Electric. It is up from its 52-week low of $9.12 and is currently trading at $19.20. DVN is a company that focuses on hydrocarbon exploration. It is also up from its 52-week low of $4.70, trading at $13.56. I like both of these companies because they are up from their yearly lows and they still have room to run. Either of these stocks or the ETF are great picks for some long-term gains.

Healthcare

The healthcare sector has been strong year-to-date with the U.S. on par to spend 20% of its GDP in this sector. This growth is expected to continue, especially with the availability of a vaccine by spring 2021. COVID-19-related revenues along with a pent-up demand for elective procedures, an aging global population, and a growing middle class in emerging markets should propel this sector upwards through the end of the year and through 2021


The Select Sector SPDR Trust Healthcare ETF (NYSE: XLV) is up $37.66 from its 52-week low of $73.54. It just hit a new high of $114.41, and I think we are going to blast past this before the year is over. Investing in this ETF is a good way to make money on the profitable sector as a whole.

But if you want to invest in the strongest stocks in this sector, two companies in particular have rallied over the past three months: Align Technology, Inc. (NASDAQ: ALGN) and DaVita Inc. (NYSE: DVA). DVA, in particular, is skyrocketing on the latest vaccine news.

Airlines

Airlines were gutted in 2020 with a drastic reduction in passenger traffic – expected to be down 60-70% both domestically and globally before the end of the year. The top six largest airline companies in the world lost a total of $110 billion in revenue year-to-date. They have been figuratively running on fumes and struggling to remain solvent.

The NYSE ARCA Airline Index (NYSE: XAL) tanked in the first quarter of the year, hitting a low of $36.49. XAL is currently trading at $76.68, but still has a ways to go before it hits its 52-week high of $112. Unlike the rest of the general market, it has not recovered in 2020, but there’s still an innate opportunity here that hasn’t been released yet – profits bottled up, ready to explode, to be yours for the taking.

I think this sector is going to take off (no pun intended) once travel bans are lifted and people start to travel for business and pleasure again.


As you can see in the chart above, XAL gapped up on the Pfizer and Moderna vaccine news announcements.

Trade the sector with XAL or grab one of the sector leaders like Southwest Airlines Company (NYSE: LUV) or Delta Air Lines (NYSE: DAL), which are leading the bullish charge.

Microchips

The chip sector has been strong over 2020 despite a U.S.-China trade war that kicked into full swing in 2019. It is expected that the Biden administration will ease tensions with China along with tariffs, which will ultimately impact U.S. manufacturers.

I think this run will be huge for a couple of reasons, but mainly because a stimulus package is likely to occur under the new administration, which will enable consumers to purchase new products like the iPhone 12 and the PS5.


One easy way to jump on the microchip train is to purchase the Vaneck Vectors ETF Trust Semiconductors (NYSE: SMH). It set all-time highs last week and is destined for more growth into the new year.

Two leaders of the semiconductor pack are Broadcom Inc. (NASDAQ: BRCM) and Tawain Semiconductor Manufacturing Company (NYSE: TSM). TSM is skyrocketing and just set an all-time high of its own with big volume.

Financials

The financial sector is up a whopping 12% in the past three months alone with bank stocks leading that charge. An economic recovery and a stimulus package are expected to increase loan demand to propel that even further. Coupled with a Fed that is committed to keeping interest rates low, it should bolster the financial sector.


The market confirms this expectation with gaps up in the Financial Select Sector SPDR ETF (NYSE: XLF) on the Pfizer and Moderna news.

If you want to dive in deeper to the financial sector to invest your money, the top performers in the past three months are Invesco Ltd (NYSE: IVZ) and Discover Financial Services (NYSE: DFS).

IVZ is an investment management company that is currently trading at $16.51, up from the 52-week low of $6.38. DFS is a financial services company – in fact you may even have a Discover card in your wallet – that is skyrocketing currently. This company is currently trading at $78.41, up from the 52-week low of $23.25.

While the COVID-19 pandemic completely upended certain sectors, the recovery is clearly looking positive for others.

But one dramatic shift in particular has my colleague, market expert Shah Gilani, very excited…

He considers the transition from traditional office spaces to virtual work and learning to be what he calls a “hyperdrive event.”

Events that change the very fabric of American life – like Netflix reimagining video consumption – fall under this category… and individual investors who are in the know early on have the chance for serious profits.

Best of all, Shah has pinpointed five specific tech companies that his research indicates are set to receive a $350 billion infusion of wealth over the next 18 months alone, thanks to this hyperdrive event.

Click right here for the full story.

To your success,

Tom Gentile

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