11/29/2021
What happened on Friday, November 26th?
Why did the stock market go down so much?
This year black Friday was seeing red in the equity markets! This was actually the worst black Friday in the equity markets on record. So, what happened that caused this:
First the obvious, the new COVID-19 “Omicron” variant had FEAR (one of the short term drivers) elevated. It’s the fear of the unknown that sent the VIX (measure of volatility) souring Friday to 28, which is the highest it has been in 2-months. There was absolutely a flight to “safety,” as we saw bond prices rise while the stock prices fell. Note, they did not rise and fall in equal ratio. Part of the stock market pullback was also falling oil prices and travel related companies. From there, it became a bit of a slippery slope, except for companies like Moderna and Pfizer, which both saw prices increase on Friday.
Second, the day was short. The equity markets close at 1 pm the day after thanksgiving AND it is typically a very low trading day, folks are paying attention to the deals, not the DOW. This can make a swing in any direction, up or down, more significant because the buyers are not stepping in to offset the sellers as quickly.
Our advice: Remember what happened in the Spring of 2020. It’s best to act on facts, not short-term unknowns. This is a buying opportunity in our opinion.
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