The S&P 500 posted its worst daily decline since late September but didn’t entirely erode October gains.
Stocks faltered at the beginning of the week as COVID-19 cases surged and stimulus talks stalled. Uncertainty surrounding the 2020 election also drove market declines.
The S&P 500 (-1.9%), Dow Jones Industrial Average (-2.3%) and NASDAQ (-1.6%) each sharply declined today. More specifically, the S&P 500 closed below its 50-day moving average for the first time in three weeks. While moves like this are uncomfortable and never easy to digest, it is important to put the decline in perspective, cautioned Chief Investment Officer Larry Adam. For the S&P 500, it was the worst daily decline since September 23 (basically one month ago). Even with the decline, the broad-market domestic index remains up ~1% for the month of October. This week, the market will receive economic data points that show the strongest quarter of economic growth in history (estimated at 25% to 30%) and the busiest week in earnings reports should highlight the resiliency of corporate America overall as earnings continue to improve and come in well above estimates.
A third wave of coronavirus cases in the U.S. spiked to 83,000, the highest ever single-day count, on October 23, coming close to that mark again the very next day, explained Healthcare Policy Analyst Chris Meekins. The average daily cases, week over week, continue to climb, as do hospitalizations and, sadly, fatalities, although the rate itself is lower than at the beginning of the pandemic.
“It is crucial for Americans to maintain vigilant mitigation measures; the virus’s spread is heading in an extremely concerning direction that could prove catastrophic for our country’s healthcare system and economy,” Meekins said. White House Chief of Staff Mark Meadows announced on Sunday that we will not be able to control the pandemic and should instead focus on vaccines and therapeutics.