The US stock market is going through a period of unprecedented instability, analysts surveyed by CNBC say. At the moment, the main indices are showing a decline, but in the near future, it may be replaced by a new round of growth in quotations.
The trading session on September 21 was marked by a drop in the market by almost 20 percent. The exception was the stocks of some technology companies, including Apple, which managed to stabilize. The decline was triggered by a massive sell-off amid investor fears that the economy would fall further due to the coronavirus. Uncertainty is exacerbated by news of a sharp rise in the number of infected in Europe, the presidential campaign in the United States, and the confrontation between Democrats and Republicans after the death of Supreme Court Justice Ruth Ginsburg.
The largest decline was noted in the so-called cyclical sector — among companies whose activities are highly dependent on the general state of the economy and the phase of the cycle in which it is located. These include transport companies as well as entertainment companies. In addition, the quotes of energy and processing companies declined.
Analysts are already comparing the current downturn with the one that took place in early and mid-September. The main hit back then were tech companies, which are now showing resilience to shocks.
At the same time, financiers are already predicting a quick recovery of the market, which will be associated, among other things, with the end of September, traditionally considered one of the worst months of the year for investors. Many of them by the end of the quarter will revise the composition of their portfolios, creating demand for certain securities.