Last Monday, the major benchmarks suffered their worst declines of the year. The rising case count for COVID-19, primarily driven by the highly contagious Delta variant, led to the most significant drop in two months for the S&P 500 (SPY) and Nasdaq. It also sent Treasury yields to their most significant decline in over three months. But the market bounced back on Tuesday as investors reconsidered their worries as hospitalizations and deaths are not at the same level they were during the height of the pandemic. The question is, was last week's rally a temporary move higher, or are the rising cases a much larger cause for concern. I will answer that question and give my outlook below, but first, let's recap the week in the markets. Read on below….(Please enjoy this updated version of my weekly commentary from the POWR Value newsletter).
Stocks rose sharply on Tuesday following Monday's steep losses and the worst trading session for the S&P 500 since May 12. Investors were essentially buying the dip in the aftermath of Monday's sell-off. Value stocks rebounded the most after falling the hardest on Monday.
The Dow jumped 549 points, recovering from its steepest one-day rout since October.