Stocks Extend Drop on Growth, Fed Report
4:11 pm Wednesday, September 08th, 2021
U.S. equities retreated as investors reassessed valuations in light of global economic risks including the spread of the Covid-19 delta variant and reductions in central bank stimulus.
Headwinds today include negative corporate updates, an Axios report indicating that Senator Manchin (D-WV) will only support $1.5 trillion for any human infrastructure plan, uncertainty if the ECB will announce a taper decision tomorrow, and a lack of leadership from the mega-cap stocks.
The underperformance of the mega-caps is the difference maker since the Invesco S&P 500 Equal Weight ETF (RSP) was trading relatively unchanged. The Vanguard Mega Cap Growth ETF was down 0.5%.
Looking at the sector performances, the information technology sector (-0.6%) is an influential laggard, but the materials sector (-0.9%) is down the most. The utilities (+1.9%), consumer staples (+0.0.4%), real estate (+0.4%), and industrials (+0.2%) sectors trade higher. The utilities sector is the standout with a 2% gain.
Sherwin-Williams (SHW), Pulte Group (PHM), Philip Morris International (PM), and Hawaiian Holdings (HA) were some of the companies that either provided cautious outlooks or downside guidance, sending shares of those companies lower.
There remains commentary about a potential market pullback, but the muted price action in the CBOE Volatility Index (18.34, +0.20, +1.2%) continues to suggest that investors aren’t entirely on board with these expectations given the resiliency in the overall market.
