Stocks spent much of the week trending lower in a wild bout of trading. Several concerns hit the press wires on a number of fronts. Chief of which has been both the coronavirus, including a new more transmissible variant, and the renewed spread of the pandemic.
The market has generally moved higher over the last few months on the reopening plans and the continued rollout of vaccines targeting COVID-19. However, this week, traders became concerned over supply chain issues with vaccines and the ability to get them effectively and rapidly distributed to the American people. At the same time, the number of citizens acquiring or succumbing to COVID has surged to record levels in the U.S. Meanwhile, Europe has continued its lockdown plans. With new strains of COVID-19 hitting populations, traders sold stocks hard on poor vaccine news.
Wild trading this week was also due to the recent use of Reddit chatrooms to find heavily shorted stocks and push a “squeeze.” Shares of troubled companies surged this week as trading shorted names took on a new frenzy, prompting regulation concerns and volatility.
Earnings were a bright spot this week. With many tech giants reporting, the results have been favorable and outlooks have also been positive. The same could be said for data released this week. Most economic measures pointed to a rebounding economy.
However, higher volatility and the poor vaccine/COVID-19 news managed to keep gains in check and produce losses during much of the week.
Be sure to check out our previous Wrap here, when a shortened week produced gains.
