Sector movers: Miners, Homebuilders pace losses as sentiment shifts a tad
Miners and Homebuilders paced fallers in the stockmarket on Thursday with a slightly worse-than-expected reading on initial weekly jobless claims acting as the apparent trigger for the selling.
However, already overnight a sharp spill lower in the share price of technology sector darling Tesla in the States had foreshadowed a possible shift in sentiment.
Linked to the above, strategists at Bank of America set a year-end 2020 target for the S&P 500 of 3,250 points, arguing that investors should begin to fade so-called 'momentum' trades in favour of valuations.
But there were more factors underlying their decision.
"We are not out of the woods, in fact quite the contrary. The months ahead of an election typically see a demonstrable increase in volatility; super accommodative policy is hitting some speed bumps - failure to pass more stimulus, proposed corporate tax hikes, etc., pose risks," they said in a research note sent to clients.
"COVID-19 second wave risk could increase amid autumn/back to school, and layoffs are accelerating."
Strategists at Barclays held similar reservations, but were more somewhat more upbeat.
"Equities had a strong run in August and could be in for a bumpier ride. Market technicals are stretched (mainly in the US), some 'concept' TMT stocks look bubbly, the bond market is getting more jittery, and US elections, virus resurgence or Brexit negotiations are potential risks.
"A pullback is thus possible, yet we stick to the view that equities will continue to grind higher over the coming months, and climb the wall of worry."
Top performing sectors so far today
Travel & Leisure 6,751.98 +1.53%
Fixed Line Telecommunications 1,272.20 +1.38%
Automobiles & Parts 2,666.06 +0.71%
Oil & Gas Producers 4,031.64 +0.68%
General Industrials 5,352.17 +0.42%
Bottom performing sectors so far today
Leisure Goods 21,661.90 -5.70%
Industrial Metals & Mining 3,215.30 -4.51%
Mining 17,741.51 -4.12%
Software & Computer Services 2,050.62 -3.60%
Household Goods & Home Construction 17,206.66 -3.27%
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