Marc Cuniberti The market continues to creep ever higher with the Dow breaching the 35,000 mark on June 29th only to back off into the 34,000’s shortly thereafter. Up from a CoVid low of around 18,300 during the third week of March 2020, the rally initially started with a select group of stocks, only to lift almost all boats as the year progressed.
All the way up, analysts and investors alike marveled at the V shape recovery that continued almost unabated. Violent rotations in and out of various sectors continued to baffle investors as the fickle ways of the CoVid recovery stock market kept even the best stock pickers guessing as to where to run. Each day seemingly brought new challenges and wild swings in portfolio balances. Index, mutual funds, and ETF buyers may have witnessed less than stellar performances as some stocks in these basket holdings may have risen while others dropped, offsetting possible gains.
Definitely a stock pickers market versus an index fund buying one, in my opinion, the pattern seems to continue. With the news about the Delta variant causing more concerns that the new surge might curtail or even derail the recovery, more and more analysts are voicing the possibility that a market correction may be approaching. Add in the stunning and seemingly relentless upward trajectory of the overall markets in the last 15 months and correction fears may be well-founded.
No one can say for sure what lies ahead in the markets where CoVid is concerned, but it’s safe to say the uncertainty has reigned supreme in all of 2020 and so far in 2021 as well.
It is said the market climbs a wall of worry, and only when all participants believe markets can never correct do many market setbacks usually occur. That said, earlier in the year, it seemed “all in” was the order of the day, and only recently have more and more investors kept a jaundiced eye on the market and their fingers at the ready on the sell button.
Fed stimulus money no doubt has a lot to do with the markets rise, as well as consumers hitting the streets again as Covid fears waned with vaccination rates climbing. CoVid meanwhile apparently had no plans of going quietly into the night, and with the new variant once again striking fear into the hearts and minds of many, the possibility of stricter measures to curtail CoVid’s spread looms large.
Although shutdowns are starting to occur once again across the globe in various countries, so far the U.S. has no such plans, at least announced publically. The pushback against shutdowns by some was constant all through 2020, and the damage the shutdowns caused is undisputed.
Whether the authorities either at the state or federal level will once again initiate shutdowns strikes fear into many, while many more fear the variant itself even more so.
Should shutdowns once again be considered here in the U.S., no doubt a contentious debate will resurface between the supporters of the shutdowns and those against.
We can also expect the markets to react negatively to the possibility of more shutdowns and quite possibly, very violently.
Opinions expressed here are those of Mr. Cuniberti and not those of any bank or investment advisory firm and should not be construed as investment advice. Neither Money Management Radio (“Money Matters”) receive, control, access or monitor client funds, accounts, or portfolios. For a list of the services offered by Mr. Cuniberti (530)559-1214. Calif. Insurance Lic #0L34249. Medicare Agent approved. Insurance services offered independently through Marc Cuniberti and not affiliated with any RIA firm or entity.
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