Stocks and index ETFs are mixed and struggling to remain in the green on Tuesday, the anniversary of the stock market’s Covid drop.
The S&P 500 dipped 0.3% before rallying back to +0.18%, while the Dow Jones Industrial Average slipped 130 points and is still struggling to get back into positive territory. Meanwhile, the Nasdaq Composite climbed 0.10% and is looking to put together three consecutive days of gains, thanks to moves in key tech stocks like Amazon and Microsoft, which are both up roughly 2% Tuesday.
Major stock ETFs are mixed Tuesday as well. The SPDR Dow Jones Industrial Average ETF (DIA) is continuing to hover slightly below breakeven, while the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ) are both marginally higher.
Meanwhile, ViacomCBS, one of the top performers in the S&P 500 since the pandemic lows with an over 700% gain, tumbled 3% after saying it would offer more stock for sale, helping to pull down the Invesco Dynamic Media ETF (PBS) by 1.6%.
Last year at this time, the coronavirus pandemic sent the S&P 500 hurling down 30% in just over three weeks, in what was the swiftest bear market sell-off ever recorded. Since the March 23, 2020 low, the S&P 500 has gained nearly 80%, changing course to notch the best start to a new bull market in history. The Nasdaq Composite meanwhile has climbed over 90%, while the Dow has ascended about 75%.
“Things have come full circle now, as stocks have staged a furious rally, with new highs happening across the globe as the economy recovers at a record pace,” noted Ryan Detrick, chief market strategist at LPL Financial.
“This bull market is off to an amazing start, but it is important to remember it is still young. While a pick-up in volatility would be normal as this stage of a strong bull market, we think suitable investors may want to consider buying the dip,” he added.
While there is reason to believe the second year could be strong in this bull market as well, based on historical data, analysts aren’t seeing quite as smooth of a path for stocks and index ETFs.
Analysts’ consensus year-end target for the S&P 500 is currently 4,099, representing a 4% hike from Monday’s close of 3,940.59, according to a CNBC Market Strategist Survey that rounds up 15 top strategists’ forecasts.
“After an 80% rebound in equity prices since the lows of March 2020, it is fair to suggest that much of the good news is getting priced in and the upside potential becomes more limited from here,” Tobias Levkovich, chief U.S. Equity Strategist at Citi, said in a note.
While there is optimism surrounding the Covid-19 vaccine rollout, there are now concerns around the 21 states that show increasing numbers of infections, as well as worries over the new AstraZeneca vaccine, which has had some issues with side effects and study parameters.
In prepared remarks published ahead of the joint hearing between Federal Reserve’ Chairman Jerome Powell and Treasury Secretary Janet Yellen, Powell said that the recovery is moving the right direction but that there is still more progress to be made.
“The recovery has progressed more quickly than generally expected and looks to be strengthening. This is due in significant part to the unprecedented fiscal and monetary policy actions … which provided essential support to households, businesses, and communities,” Powell said in the prepared comments.
“But the recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes,” he added.
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