Today investors and traders ran to buy all the re-opening, post-vaccine recovery, cyclical stocks that they dumped yesterday.
Macy’s (M) is up 4.29% as of 3:30 p.m. New York time after plunging 4.90% yesterday. Amusement park operator Cedar Fair (FUN) is up 4.12%. Cyclical Dupont (DD) is up 1.34% after closing down 4.46% yesterday. Carnival Cruise (CCL) is ahead 7.83% today after dropping 5.74% yesterday.
It’s as if the market has decided that the really scary upward trend in new infections from the spread of the Delta variant is done with and over. Pandemic yesterday. No pandemic today..
The figures from the pandemic front say otherwise. The 14-day change in new cases as of July 19 is 198%. The 14-day change in new deaths is 44%.
Today it’s time to buy on the dip no matter what the pandemic news.
Markets have the ability to ignore news trends–bad or good–for a long time. The market essentially ignored the very negative trend in pandemic infections until yesterday. And investors and traders have decided to ignore it again today in favor of snapping up some “bargains.”
One thing I’ve noticed over the last 30 years watching the stock market, though, is that once a major piece of news gets on the market’s radar screen, it doesn’t go away quickly. Certainly not after a buy on the dip bounce. I’m certain that pandemic trends will scare stocks again not too far down the road.
Until then, watch for the parade of earnings from growth momentum leaders that begins with Netflix (NFLX) today and continues next week with the likes of Apple (AAPL) and Amazon (AMZN).
