U.S. markets and stock exchange traded funds were mixed as renewed coronavirus concerns and a weak economic update both offset optimism over the latest stimulus package.
On Tuesday, the Invesco QQQ Trust (NASDAQ: QQQ) rose 0.2%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was down 0.3%, and iShares Core S&P 500 ETF (NYSEArca: IVV) was flat.
In the latest update on the state of the economy, U.S. home sales dipped more than expected in November, and consumer confidence unexpectedly retreated this month after a spike in U.S. infections and deaths that led to stricter measures, Reuters reports. The poor data fueled concerns of further economic disruption as a new Covid-19 mutation spreads across the United Kingdom.
“You could point to consumer confidence, existing home sales being a little weaker today, but I think it’s broader than that. The market’s a bit overpriced, it’s looking for a reason to back off,” Kenny Polcari, managing partner at Kace Capital Advisors, told Reuters.
Keeping Up Tech
Technology stocks, though, continued to maintain their post-coronavirus strength, with the S&P 500 technology subsector hitting a record high, as investors looked to areas that are relatively more insulated from the disruptions.
“If the second strain of the coronavirus starts to impact countries again, then that whole work from home trend is going to pick up steam, and that’s what’s going on in technology today,” Polcari added.
Global markets have been losing momentum as more countries take on more restrictions to limit travel and contain the resurgence in coronavirus cases worldwide, notably from the U.K., where the new strain of the virus is believed to be much more contagious.
“It would be a brave man to suggest this will just remain a U.K.-specific issue,” Derek Halpenny, head of research for global markets in the European region at MUFG Bank, told the Wall Street Journal. “Are we going back into another phase of more pronounced global lockdowns again?”
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