Most momentum stocks lost 20% in the past couple of weeks. Big Tech reported another set of impressive earnings and yet, it didn’t matter this time. Each of them except Google went down.
The list of European countries applying stricter COVID measures continues to get bigger. The Europe 50 index broke below its September lows early last week and it has been in a free-fall ever since. Does the same destiny await the U.S. Market? So far, the S&P 500 and the Nasdaq 100 have managed to hold above their September lows. If those levels are lost, we might see a quick 5-7% drop. Everyone knows that there will be a new stimulus at some point in November. And yet, the market is starting to panic because of the renewed lockdowns and the delay of working vaccines. When there’s panic, there’s no rationality. We can even see stocks like AMZN which are benefiting from stricter COVID measures and just reported a record quarter, under heavy pressure.
The U.S. Presidential elections should supposedly end on Tuesday and bring a little bit more clarity about the government’s priorities in fiscal spending. This has the potential to calm markets down a bit as people can allocate their capital with more confidence.