Stocks depressed Thursday with concerns of the economy's recovery following a couple days of choppy action. Investors took some profits after the excitement in stocks through the election and the vaccine trial news. In retrospect profit taking seemed inevitable but we all know the market doesn't always play with logic.
Investors are looking past the step towards a vaccine and stimulus package to focus in on the short-term. New Covid-19 cases are consistently at or around record numbers and the likelihood of more economic shutdowns grows. Major cities like Chicago and New York are mandating restrictions to business that includes human interaction. Of course this threatens the recovering economy from the original shutdowns in March. Considerations of more lockdowns have investors skittish.
The returns below are a combination of Wednesday and Thursday's action. Thursday alone the S&P 500 (C-fund) was down 1% for the day.
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The sell-off was broad Thursday hitting all sectors. The table below (from CNBC) is of the TOP performing sectors on Thursday. No sector was safe. Technology was down just under 1% despite its advantage during lockdowns. It seems the opportunity for profit taking trumped logistic concerns of the possible future lockdowns.
The pull back Thursday was not a shocking move considering the action of the two previous weeks. The C-fund is still up more than 8% for November and its lagging the S and I-fund. Money did rotate into less risky assets like bonds. The F-fund gained 0.41% between Wednesday and Thursday.
The S&P 500 (C-fund) pulled back to under the lows of Monday although remains up for the week. The last three days were a result of an over excited market oscillating back to an appropriate value. Thursday was a needed breather for the chart. There is a lot of room to pull back further but trend lines may help to establish support before moving forward.
The DWCPF (S-fund) continued to flirt just below the top of its trading channel of the last three months. Open gaps linger below but the index did not get reach too close to the gap at the 1600 level. The top of that gap actually held as support during Tuesday.
The Dow Transportation Index did fill an open gap from Friday. A short lived trading channel was formed in mid-October and the index is back within it.
The EFA (I-fund) fell Thursday after some decent gains of Wednesday. The open gap into the week as held as support. The I-fund was outperformed so far in November. The I-fund was given a 0.57% gain over Wednesday and Thursday.
BND (F-fund) was up for the last two days as investors moved into less risky assets while stock prices took a breather. Although still in its falling trading channel, the index closed at the top between its 20 and 50-day EMA to very partially fill the open gap left from last week.
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Thanks for reading. We'll see you back here on tomorrow.
<!--new line --> TommyIV
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