To recap my previous post, the NASDAQ composite has recovered most of its gains from its recent selloff and is approaching all-time-high prices as tech stocks have recovered momentum. The S&P 500 (SPX) Index reached record levels last week as investors look with optimism toward an accelerating economic recovery.
NASDAQ Index – (2 Year Chart)
S&P 500 Index – (Two Year Chart)
It is interesting to look at these charts and see how strongly these indices have rallied. Today, the pandemic’s lows seem far behind us. Many analysts have argued over the past year that the stock market is overpriced and just as many have questioned how much farther could stocks run, yet only in hindsight will that be evident. For the retail investor, it may be tricky to manage turbulent times if things were to change in the months ahead.
The Archegos blowout made the news in the past couple of weeks, where highly leveraged bets were made on a few names like Farfetched Ltd, ViacomCBS Inc, and Discovery Inc. As those stocks tumbled, many could have thought there was something going on with the companies internally. Now it looks like these stocks could be a good buy as the liquidation of Archegos is likely done and their prices have started to stabilize. For example, the price of ViacomCBS (VIAC) seems to be steady at around $42 and it may be a good time to buy it once again.
Viacom – (6 Month Chart)
As the vaccination numbers continue rising in the U.S., covid cases around the world continue to increase. Europe is going into lockdown again, Brazil has experienced record deaths, and other countries in Latin America are being deeply affected by this new wave of the virus. Fed Chairman Jerome Powell discussed the importance of vaccinating globally in his recent remarks, as new variants of the virus could continue to affect the economic recovery not only in the countries directly affected but also could put the U.S. recovery at risk.