Reopening Rally Sputters On 'Second Wave' Fears
- U.S. equity markets retreated this week following a frenzied "reopening rally" as investor attention - and the media spotlight - returned to the coronavirus pandemic amid concerns of a "second wave."
- Reminiscent of the "risk-on/risk-off" trading pattern seen during the early stages of the last post-crisis recovery, trading action over the past few weeks has exhibited a clear "reopening vs. stay-at-home" paradigm.
- The S&P 500 dipped by 4.7% on a volatile week that saw the large-cap index briefly climb into positive territory for the year before hitting a stretch of mid-week turbulence.
- After surging by 11% last week amid a historic rally, the broad-based equity REIT ETFs finished lower by 5.4% with all 18 property sectors in negative territory while Mortgage REITs retreated by 2.6%.
- Housing data was again the bright spot in an otherwise mediocre slate of economic data. Mortgage applications to purchase a home rose for the eighth straight week as mortgage rates dipped to historic lows.
