Broker Check

New variant and the stock market

November 26, 2021

I wanted to get out a blog post in regards to today’s market selloff. You can get market corrections at anytime for a multitude of reasons. Certainly, a new COVID variant does create fear in the market. The market is a discounting mechanism and tends to shoot first and ask questions later. This is especially true on market shortened holiday trading sessions.

It will take a couple of weeks to figure out how virulent and deadly this new strain of coronavirus is, and of course everyone is concerned about the virus and its effect on people. However, from a market perspective the economy is already set up to work from home and deal with viruses. This may create short-term economic issues, however the Federal Reserve and federal government is standing by to assist the economy with working through it.

Shortened holiday trading sessions tend to be very volatile. Many traders are at home and leave stop orders in place to sell stock in case something happens. I’m certain many of those orders filled and money is moving around quickly. However, this feels more like a market bottom then something much larger. We will see in the upcoming days if this selloff continues, however I suspect that buyers are on the wings ready to step in.

The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.