With stocks rebounding strongly over the past week and some trading at record highs, investors will look for signs in the final week of 2021 as to whether that rally could continue into next year.
The S&P 500 set a new closing record Thursday after encouraging reports of lower-than-expected economic risks from the Omicron variant of COVID-19. After last week's gains, it expanded its year-end gains to 26%. Still, uncertainty about the impact of the new tension on the economy could fuel more market volatility, as many business sectors face labor shortages and ongoing supply chain disruptions. In this uncertain economic environment, here are three large-cap stocks to keep an eye on in the coming week:
1. Tesla
Tesla (NASDAQ:) shares have seen a strong rally over the past week, rising more than 14% and rising more than $1,000 a share. Some hope the electric car maker will continue its upward trend next year, especially when its CEO, Elon Musk, is nearly done selling much of its assets. Musk wrote on Twitter last week that he is "almost done" to reduce his stake in Tesla. So far, the world's richest man has sold $15.4 billion of his shares in the company. These sales are intended to cover an estimated tax bill of more than $10 billion from options he is expected to exercise.
Wedbush analyst Dan Ives wrote in a note:
"This statement from Musk removes an overhang on the stock with selling pressure and negative perception issues now removed and the focus back on fundamental drivers for the street."
Tesla shares closed at $1,067 on Thursday after last week's rally that extended the EV leader's gains to nearly 50% this year.
2. Delta Air
Airline stocks end the year under pressure again amid the chaos caused by Omicron's rapid global spread.
Delta Air Lines (NYSE:NYSE:) and other airlines reported Thursday that they canceled dozens of Christmas Eve flights as COVID hit crews; on Christmas Day, nearly 1,000 more flights were cancelled. "Winter weather and Omicron forced Delta Air Lines to cancel 344 flights on Saturday, out of about 3,000 scheduled flights, after exhausting all options and resources to avoid those cancellations," a company spokesperson said, adding that the impact is likely to continue. on Sunday.
"The nationwide spike in Omicron cases this week has had a direct impact on our flight crews and the people running our operation," United Airlines (NASDAQ:) said in a statement Thursday. "As a result, we have unfortunately had to cancel a number of flights and are informing affected customers before they come to the airport."
Shares of Delta Air, the most valuable US airline, are down 25% from their 52-week high. They closed for $39.30 on Thursday. Along with the pandemic-related hit, there is likely to be additional pressure that will continue to hurt airlines next year. The largest of these is higher fuel costs threatening airline revenues in the current quarter and beyond.
3. Pfizer
Of the large-cap healthcare stocks, Pfizer (NYSE:) closes 2021 strong.
U.S. regulators last week approved the company's COVID pill for use in emergencies. The drug, Paxlovid, is expected to be a strong weapon against the virus once production gets underway, giving people at high risk for serious complications from the disease a way to avoid hospitalization. Oral therapy was found to reduce hospitalizations by 88% when administered to unvaccinated high-risk patients within five days of symptom onset. The New York City-based company, which is also the main supplier of the mRNA-based COVID-fighting vaccine, plans to ramp up production of the pill next year, providing PFE with a new revenue stream.
[19459002 In November , the US government said it had ordered 10 million courses of the Pfizer Pill at a cost of nearly $5.3 billion — about $530 per treatment. Pfizer shares closed at $58.71 on Thursday, after gaining nearly 60% for the year.
