Market Notebook

Broader U.S. equities as measured by the ticker SPY corrected early in the week and then recovered sharply towards the end of last week. U.S. equity market price action contrasts with many global markets ex-U.S., which sold off last week without reprieve. It appeared that those countries having difficulty with the resurgence of Covid were the countries whose markets struggled the most.

Bond prices in the U.S. generally moved higher, although much of the positive price movement appeared to occur in longer duration instruments.

Price action last week suggested that U.S. equity market participants are still in a “buy the dip” mindset. The previous three closes below the 20-day exponential moving average recovered during the following two sessions suggesting continued strength in the upward trend. Nonetheless, there will eventually be a correction to the trend. It is never a bad idea to keep and update a list of those instruments one would like to own if they pulled back 10% or more during a wide-based market correction. 

All the best in the week ahead.