Nick Giacoumakis, President & Founder of New England Investment & Retirement Group, joins Yahoo Finance's Kristin Myers to break down the latest market action as stocks rally on Moderna's positive vaccine news.

Video Transcript

KRISTIN MYERS: Let's talk more about today's market moves. We're joined now by Nick Giacoumakis, president and founder of New England Investment and Retirement Group. Nick, so of course we have this good news here on the vaccine, but we did see last week we got news from Pfizer and their vaccine, with an efficacy rate of 90%, which is surprising to many. And we saw a pause in the rally midweek.

Do you think since we have not one, but two vaccine candidates right now with a really high efficacy rate, that this is going to be enough to really fuel a rally through to the end of the year? How much volatility are you expecting up ahead?

NICK GIACOUMAKIS: Thank you. I think it is. If we look at the news over the past week and a half, it has been fantastic. And to have, obviously, two top notch drug firms come out with the vaccine is obviously great. And I think it's just a matter of time before we maybe see, you know, Johnson & Johnson and a few others also come up with their various versions of the same thing.

You know, that combined with also the election coming to, obviously, a close-- looks like hopefully that gets wrapped up very, very soon, and then it's going to be on to the next, you know, major event, which will hopefully be a stimulus coming down the pike. So I think, you know, based upon those three areas, we're going to see some volatility, but we're looking for bluer skies ahead.

KRISTIN MYERS: OK, but I do have to ask, because we just heard from the doctor talking about how bad the virus is right now. And even though, yes, we do have these two vaccine candidates, we're not going to all be able to take this vaccine for quite a bit of time. So as you, you know, hear these stories, see these headlines about the vaccine hitting these record-breaking levels, do you not at all or do you worry of how much of a headwind the virus is going to be, at least through the next four to six months?

NICK GIACOUMAKIS: Oh, no doubt. No doubt. And I think what we're going to see is if you look at the stocks that are rallying today, they're rallying, obviously, on the good news. You know, you have cruise lines, you have airlines that are doing very, very well-- everything that was really, really depressed and beaten up before the vaccine came out. So to your point, Kristin, it's going to probably be sometime February, March before we start to see distribution of that vaccine to the more general masses-- again, no one knows exactly for sure, like you said with the doctor.

But certainly, it'll be essential officials first and elderly and people in nursing homes that will be the first people, I understand, to get the vaccine. But as it gets its way and infiltrates into our general population, I think the fact that we have the vaccine and there's a light at the end of the tunnel and something to be really, really enthusiastic and hopeful about in itself-- because, remember, the markets, as you know, are forward looking, right? So with that being said, certainly still going to be volatility, there's still going to be potentially a really tough winter as we come into, you know, cold and flu season, which obviously causes more of a spike in the vaccine. We have to be cautious, and like the doctor said, be very, very careful until we get there.

KRISTIN MYERS: This is going to be a little bit dramatic, but do you see this news being the nail in the coffin for tech? I mean, they have done very well throughout this pandemic. But of course, every time we get news about a vaccine, we see tech not doing as well.

NICK GIACOUMAKIS: No, not at all. I think technology is going to do absolutely fine. We have to step back and look at the first nine months of the year. The disparity between technology, high beta growth stocks, and obviously, the recovery trade and sectors of value and industrials had gotten so out of whack and had such a large spread that there's a lot of catch up to be played by what's rallying today, what rallied last week.

And we even saw last week, you know, Monday and Tuesday, we had the recovery stocks and the value stocks really step up big on the Pfizer news. Then you may have noticed by Wednesday, Thursday technology was starting to come around again. So I think because of the superior earnings growth that you're going to see with the growth stocks, that that trade isn't over.

People are talking about know Zoom like it's going away and the Docusigns and the Teledocs-- granted, a lot of these positions ran too far too fast, but I don't think the fundamentals of Zoom, and certainly not the fundamentals of Docusign are going to change. These are way of life companies and adapted to the way we do business today and the way we communicate with our families today. That's just not going to go away.

KRISTIN MYERS: Well, I want to get into your picks. We've been calling them Nick's Picks over the last couple of hours after we were reading your notes. I know what you're saying about tech, but where do you see some of the really interesting sectors going through into next year, especially once that vaccine really starts to get rolled out?

NICK GIACOUMAKIS: Sure. So we like housing stocks. We like transportation stocks. If you look at the 26 to, say, 40-year-old generation that are right now starting families, having kids, moving out to the suburbs-- that trend's not going to change. As we also know, look at the housing numbers over the past couple of months, they've been absolutely fabulous. There's just, plain and simple, not enough supply for the demand out there.

So with that being said, I think over the next two to three years, we're going to see that trend in housing stocks-- works really well. You know, we use the ETF, the ITB. We like those names. We also like, you know, some of the transports-- the UPS's, the FedExes-- that sector, again, is going to continue to do well.

We like the defense stocks, which fall into the industrials category. And also, we still like the semiconductors-- the AMD's and the Nvidias and the stocks that are related to 5G and the rollout of 5G. Again, the technology is not going to change.