Following the Dow Jones Industrial Average's (DJI) worst daily drop of the year, market experts were split on whether Friday was a good buying opportunity.
The index fell almost 900 points, while the wider S&P 500 (GSPC) index fell 2.27 percent.
Concerns over a new COVID type discovered in southern Africa led to market declines in energy, financials, and industrial equities.
On Friday, Simeon Hyman, ProShares Global Investment Strategist, told Yahoo Finance Live, "To the degree this isn't as huge as Delta was eventually, then I think maybe it's a little bit of a buying opportunity." "All of the economic data over the last month or so has been quite strong—I mean, the ISM Services index has reached an all-time high... Manufacturing was also quite strong. In addition, retail sales increased by 1.7 percent.
Other strategists are raising the alarm bells that danger is on the way.
"I don't think it's a good time to buy. This, I believe, is the first stage in a multi-step decline in the S&P 500", Ed Budowsky, a managing partner at Chapwood Investments, told Yahoo Finance Live (video above). "Because the market is so overvalued, this new version provides an excuse to sell off the market."
Chapwood went on to say that the market is in a good place "For several months, it has been overvalued by 31%. Going into 2022, there will undoubtedly be a negative trend.... This type of value is just impossible to sustain and justify over time”, remarked the strategist.
During Friday's abbreviated trading session, the Dow Jones Industrial Average fell more than 1,000 points at one point.
Concerns about further lockdowns and tougher restrictions led to a drop in travel-related stocks on Friday. In the meanwhile, stay-at-home trades have recovered: Zoom (ZM), a video calling software company, is up more than 7%. During the truncated trading session, Peloton Interactive (PTON), an at-home workout startup, rose more than 5%.
Concerns about further lockdowns and tougher restrictions led to a drop in travel-related stocks on Friday. Meanwhile, stay-at-home trades have recovered: Zoom (ZM), a producer of video conferencing software, was up more than 7%. During the truncated trading session, Peloton Interactive (PTON), an at-home workout startup, rose more than 5%.
On Yahoo Finance Live, BNP Paribas Asset Management Chief Market Strategist and Co-Head Investment Insights Centre Daniel Morris said: "I think it's a reaction to the uncertainty." He later added: "We clearly are going into the winter, and it does seem, at this point, anticipating the potential problems rather than waiting to see if they're confirmed."
Pfizer (PFE), a vaccine producer, hit an all-time high on Friday after a Citi analyst said the firm might provide a variation injection in 100 days.
Even if equities are still on autopilot, Goldman Sachs strategists warn that not every section of the market is a long-term buy. Stocks with strong exposure to tight labor markets, which run the risk of eroding profit margins as wages are boosted, are among the worst to invest in a US economy striving to recover from the COVID-19 epidemic.Stocks