U.S. markets and stock exchange traded funds retreated Wednesday as the delayed rollout of the Covid-19 vaccinations and a slowdown in the economic recovery weighed on sentiment.
On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) fell 1.5%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was down 1.1%, and iShares Core S&P 500 ETF (NYSEArca: IVV) dropped 1.4%.
Hani Redha, a portfolio manager at PineBridge Investments, pointed to the speed of distributing Covid-19 vaccines and lingering lockdown measures contributing to a ‘double whammy’ of bad news for markets, the Wall Street Journal reports.
“I think the market expected that by now we would be talking about loosening, not tightening restrictions,” Redha told the WSJ. “On the vaccine rollout, this is very problematic for the near term. It is very critical for shaping the growth bounce back, and these issues are just adding more delay to that.”
There were previously speculations of friction between AstraZeneca and European Union officials over a vaccine shortfall. Meanwhile, the Biden administration has set an optimistic target of providing enough coronavirus shots to vaccinate most of the U.S. with a two-dose regimen by the end of summer.
“There’s been a bit of a shift of tone in markets in the last few days. Markets are starting to worry about COVID again,” Catherine Doyle, investment specialist at Newton Investment Management, told Reuters, pointing to the Brazilian and South African variants of the virus.
Nevertheless, Victoria Fernandez, chief market strategist at Crossmark Global Investments, argued that the vaccine rollout and the economic weakness are old news, so the pullback may be more due to the market’s recent run to new highs.
“I really think it’s a hodgepodge of different things and the market is saying, you know what, we’re taking a breather,” Fernandez told the WSJ.
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