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Stocks End Week Lower After Plummeting on Friday Due to New COVID Variant Thumbnail

Stocks End Week Lower After Plummeting on Friday Due to New COVID Variant

Due to a sharp selloff on Friday, the Dow (-2.0%), NASDAQ (-3.5%), and S&P 500 (-2.2%) ended the week in negative territory.  Meanwhile on Friday, a flight to safety resulted in taxable bonds rocketing back to finish the week roughly flat, with tax-free municipal bonds rallying to a slightly positive week.

 

Favorable economic data was reported earlier last week, including the lowest amount of jobless claims in nearly 60 years, with the unemployment rate reaching new pandemic lows.  However, that data from earlier in the week was masked by the huge selloff on Friday, as the markets reacted to a new COVID variant discovered in South Africa.  Many countries responded by prohibiting flights from southern countries in Africa, and the markets plummeted due to fear of another wave of the pandemic and possibly more shutdowns. 

 

It seems that cooler heads are prevailing, as some scientists believe that this new variant may have much milder effects, and may also be prevented by vaccines already administered.  Thus, the markets are opening higher today to recover some of Friday’s losses.  The new variant has also masked another headline lurking out there, which is the debt limit that needs to be addressed by Congress before Friday, or else there will be another threat of a government shutdown.  We believe this will result in more political chess matches between the main political parties, but will likely get resolved before the deadline is reached.  Expect a bumpy ride this week!



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.