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As the tech-laden Nasdaq sold off further in a three-streak market session by 4.1%, the S&P 500 and Dow Jones Industrial Average followed suit with a 2.8% and 2.25% drops respectively. However, given the swift Dow Jones futures recovery despite the negative coronavirus vaccine news, it seems this market slump is more of a blip than something to be concerned about.
Coronavirus Train Losing Steam?
Last Tuesday, AstraZeneca (AZN) suspended its late-stage trial on the coronavirus vaccine because it caused an “unexplained illness”. AstraZeneca framed this event as something that can happen during such a trial, so further investigation is needed.
Therefore, it may or may not turn out to be a serious challenge to the notion of a “fast-tracked” vaccine, so heavily pushed by the Trump administration. However, what is more important to note is that this news, as a harbinger for such projects, did not nearly upset the market as one would think it would.
At least, according to Dow Jones futures, which went up by 0.7% this Wednesday, along with S&P 500 futures by 0.9% and Nasdaq by 1.4%. Of course, we are talking about futures, so they may not represent the actual state of the stock market in its next session.
Nonetheless, as we explained previously, it seems that people are learning that none of the things attributed to the COVID-19 pandemic can be trusted. Counting cases doesn’t make sense because the actual deaths everywhere are at their lowest no matter if lockdowns or masks were instituted or not. Testing itself is rife with false positives, and every virus-related death is massively over-reported, clumped with co-morbidities.
Politicians are already on the brink of ditching the whole pandemic narrative, as Florida Governor Ron DeSantis demonstrated at the end of last month.
“We will never do any of these lockdowns again, and I hear people say they’ll shut down the country, and honestly I cringe,”
The way things are going, the coronavirus narrative might just disappear from the news cycles entirely after the election, just like the Russia Collusion narrative dropped.
The Recent Drop in Stocks Explained
As the Nasdaq hits correction territory, diving by over 10% in the last three days, it bears to note which stocks were largely responsible for dragging it down:
- Boeing (BA) by -5.8%, following its continued woes to exert quality control, this time over Boeing 787 Dreamliner planes.
- Nvidia, AMD, and Micron, following the news that the U.S. Department of Defense is considering banning China’s largest chip manufacturer, SMIC.
- Apple (AAPL) and Microsoft (MSFT) fell 6.7% and 5.4% respectively.
- Tesla fell by 21%.
- Alphabet (Google), Facebook, Amazon, Netflix losing over 3%, while Apple plunged over 6%.
- Perhaps most importantly, SoftBank lost 7%, after the discovery it bought billions worth of call options in many of the stocks listed above, thus driving their valuations.
The big winner in the market correction was Tesla’s competitor, Nikola, rising by 53% thanks to its newly formed partnership with General Motors. However, almost all of the stocks listed as fallen have begun to climb, some more rapidly than others. This means that many traders understood this is their opportunity to buy more highly valued blue chip stocks, as others were spurred into a sell-off.
After all, if you understand market fundamentals and corporate consolidation in the wake of the coronavirus pandemic, it is easy to see why most of these companies are only poised to grow.
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