Given the waves of recent sell-offs that have stormed through Wall Street, stocks rallied for Tuesday’s second day in a row. The other week, the market was at its peak, and the selling was quick and violent. The impact appeared minor, with the S&P 500 at its downtrend only last week 4% off all-time highs established in November.
According to Art Hogan, Chief Investment Strategist at National Securities, the consequences seemed significantly severe beneath the surface.” So move the trunk lid around a little bit and look at what’s happening beneath the surface. You can see that there’s been a big sell-off in everything related to acceleration and expansion, all the global epidemic darlings, a lot of the leisure travel names,” Hogan said on CNBC’s “Trading Nation” on Monday.
On Monday, approximately half of the S&P 500 had been in a slump or even worse, having dropped at least 10% from 52-week highs. Among the worst-affected companies this year, Penn National Gaming, Biogen, and Gap have fallen more than 50% from their peak levels. Growth stocks, in particular, have been heavily discounted. As of Monday, the IVW growth ETF, which owns Microsoft and Amazon, had lost roughly 2% in the previous week, nearly double the S&P 500’s losses. With significant enhancement on the cards, it is likely trying to point to the truth that, if not today, certainly this week, we’ll presumably see a position where much of the pessimism has worked its way into stock prices,” he continued.
According to Hogan, a much worse sell-off than just what a cursory glance at the markets implies might benefit investors. Concerns about the new dual challenges of the omicron version and a much more aggressive Federal Reserve have been priced in after the rapid run-up this year. He added that it would also provide investors with a more vital point of entry.
“When pricing seemed to be pushed in November, markets reacted abnormally to the two most recent difficulties.” So it’s not only about what happened last week or this week.