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By Alex Eule
| Monday, January 4 Change
of Plans? Investors expecting a
fresh start to 2021 got a rude awakening. Stocks suffered their worst day in
months, with Covid-19 concerns growing, the vaccine rollout in
question, and U.S. politics headed for more uncertainty. In other
words, the first day of 2021 felt a lot like most of 2020. The Dow
Jones Industrial Average fell 383 points, or 1.3%, on the day, while
the S&P 500 was off 1.5%. For both indexes, it was the
worst performance since Oct. 28, a day when Europe had announced new
Covid-19 lockdowns. Today
followed a similar pattern, with U.K. Prime Minster Boris
Johnson announcing a new
nationwide lockdown beginning tonight, with schools and
nonessential businesses closed through mid-February. While investors have
generally overlooked worsening Covid-19 conditions, that view is becoming
harder with vaccine efforts stumbling
in the U.S. Markets,
meanwhile, are having to reassess potential expectations around Washington's
2021 makeup. For the last two months, Wall Street has been planning
for dividend government, with Democrats controlling the White House and House
of Representatives and Republicans in charge of the Senate. Investors
seemed to like the idea of divided government and stocks were
up 11% since Election Day, heading into the new year. But early voting data
and new polls suggest that tomorrow's runoff election for both
of Georgia's Senate seats could hand that body to Democrats, as well. A
Democratic sweep could mean larger stimulus in the months ahead, but it
would also increase the chances of new regulations and taxes. Ultimately,
it's hard to know what mattered more today: Covid or politics. Either
way, it was the worst start to a trading year since 2016. |
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DJIA: -1.25% to 30,223.89 The Hot
Stock: Flir Systems +19.2% Best Sector:
Energy +0.2% |
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