Inventory market bears get a shot within the arm. A brand new virus pressure is the bad-news cataly
Inventory market bears get a shot within the arm. A brand new virus pressure is the bad-news catalyst sinking shares worldwide. But, it comes as investor sentiment was fairly bullish and positioning was prolonged. For the final two weeks, Horizon Investments’ Market Notes compiled the methods buyers have been placing themselves in a precarious place: PIIGS Fly and Different Tales of Traders Reaching for Dangerous Bets and File Excessive S&P 500 Ignites Unhealthy Retail Investor Curiosity. Add to that the document streak of bullish positioning within the weekly survey from the Nationwide Affiliation of Energetic Funding Managers. By no means earlier than has it been above the 100 stage for 5 weeks in a row!
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Keep away. The information out of Europe is distressing; a brand new pressure of the virus spreads extra simply than earlier than. That’s prompting governments in Western Europe and Canada to shut their borders to British vacationers through the vacation season. The S&P 500 opened about 1.2% decrease than Friday’s shut, primarily erasing final week’s acquire. However larger ache is being felt within the trades which are extra geared to world development, together with small-caps, worth, and European equities.
What issues now? Based mostly on cross-asset value motion Monday — and the variety of out-of-office replies flying round Wall Avenue electronic mail servers — we imagine this can be a correction in a market that has gone straight up since early November. Most significantly, it seems current vaccine know-how is efficient in opposition to this new pressure of the coronavirus. These are the elements we’re listening to, not the short-term hit to financial development. And in case it was buried within the sea of purple ink this morning, Congress agreed on a stimulus package deal price about $900 billion, simply the bridge the economic system must get by what seems to be a tough winter.
Communicate up! With 4Q winding down, it’s time for Horizon Investments’ very quick quarterly advisor survey. Right here’s the hyperlink to tell us what challenges you face and the way we may also help.
Taking a vacation. Horizon’s Huge Quantity and Market Notes will likely be on trip this week and subsequent, and can return in 2021. We want you and yours a really pleased vacation season!
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