FDA's Full Pfizer Approval Fuels a Risk-On Rally

Growth stocks and related exchange traded funds rallied Monday as investors shifted to a risk-on mood in response to the U.S. drug regulator granting full approval for Pfizer-BioNtech’s Covid-19 vaccine.

The U.S. Food and Drug Administration has fully approved the Pfizer Inc/BioNTech SE Covid-19 vaccine for people aged 16 and older, Reuters reports.

“Investors are looking at the approval as additional reasons why we should not fear the Delta variant, that we will continue to be able to fight this virus and succeed and that whatever slowdown in the economy is occurring now will likely be short-lived,” Sam Stovall, chief investment strategist at CFRA, told Reuters.

The clearer outlook on the fight against the coronavirus pandemic has helped ease sentiment after a volatile week that sent equity markets oscillating on rising cases in the Covid-19 Delta variant.

Investors are now waiting on the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, for further hints on where the central bank stands on monetary policy tapering for its aggressive pandemic stimulus plans.

“The Fed seems to have done a good job of telegraphing the move … and a taper could be seen as bullish – the Fed wouldn’t contemplate pulling the punch bowl away if it continued to have lots of doubts about the economy,” JJ Kinahan, chief market strategist at TD Ameritrade, told Reuters.

Investors interested in the growth style can turn to targeted strategies like the American Century Focused Dynamic Growth ETF (FDG), which is designed to invest in early-stage, high-growth companies. FDG is a high-conviction strategy designed to invest in early-stage, rapid-growth companies with a competitive advantage and high profitability, growth, and scalability.

Additionally, investors can look to the American Century STOXX U.S. Quality Growth ETF (NYSEArca: QGRO). QGRO’s stock selection process is broken down into high-growth stocks based on sales, earnings, cash flow, and operating income, along with stable-growth stocks based on growth, profitability, and valuation metrics.

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