After three days of choppy rotational action in response to Covid-19 vaccine news, the market narrative took a pessimistic turn Thursday. Concerns about the growth in virus cases, hospitalizations, and deaths is pushing some states and cities to move toward stay-at-home orders and other restrictions. While the hope of an effective vaccine is still present, there are worries that it is going to take a few months before things are under better control.
Market players have been looking to see which way the recent rotational action would resolve itself and it now looks like the bears are gaining an upper hand. Breadth was very poor with around 1,800 gainers to over 5,700 decliners but there were some pockets of speculative strength primarily in electric vehicles and cannabis names. It was narrow but there obviously are still traders with cash looking for action.
What has been the biggest positive recently is that market players have been looking ahead and anticipating a reopening of the economy. They have been willing to shrug off the recent growth in Covid cases because they saw light at the end of the tunnel. The mood shifted Thursday and there was greater focus on short-term concerns.
The good news is that there is still interest in stock-picking and there is focus on individual names. Some of the larger-cap stocks are being sold as a "risk off" trade, but there still is focus on fundamentals and charts.
After the bell, Cisco (CSCO) is seeing a strong reaction to earnings, which may help the technology sector, but if you are looking for safe havens we are back to some of the Covid names that were leading for several months.
Have a good evening. I have my internet problems fixed and will be back in action Friday.