Market Pares Losses After Sell Off On Fed Meeting; Financials, Vista Outdoor, And Avantor In Focus | Summary and Q&A

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June 16, 2021
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Investor's Business Daily
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Market Pares Losses After Sell Off On Fed Meeting; Financials, Vista Outdoor, And Avantor In Focus

TL;DR

Despite volatility triggered by the Fed announcements, the stock market closed off the lows, with financials in focus.

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Key Insights

  • 📪 The stock market experienced volatility during the Fed announcements but closed off the lows.
  • 🛀 Rotation in the market continues, with the Dow currently out of favor and the Nasdaq showing resilience.
  • 🎁 Financials present a potential trading opportunity, with the XLF ETF finding support at the 50-day moving average.
  • 😷 Specific stocks like Vista Outdoor and VTR in the leisure products and medical sectors, respectively, show positive technical and fundamental factors.
  • 🪡 Investors need to be nimble and consider sectors with secular growth for investment opportunities.
  • 🤩 Market resilience and support at key moving averages indicate that overall, the market remains strong.
  • 💳 The upcoming Olympics and subscription models in certain industries provide potential growth opportunities for specific stocks.

Transcript

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Questions & Answers

Q: How did the stock market react to the Fed announcements?

The stock market initially saw a downdraft after the Fed announcements, but managed to pare losses by the end of the day. Volatility is common during such announcements, but overall, the market handled itself well.

Q: Should investors be concerned about the Dow trading below the 50-day moving average?

The Dow's performance aligns with the recent rotation in the market. While it has been resilient in the past, it is currently out of favor compared to the Nasdaq. Investors need to be nimble and consider focusing on sectors with secular growth.

Q: What is the potential trading opportunity in financials?

The pullback in the XLF ETF to its 50-day moving average presents a potential opportunity for investors to add to or initiate positions in financials. The pullback was mild, and the support at the 50-day moving average is encouraging.

Q: What are some notable stock movements in specific sectors?

Vista Outdoor (VSTO), a leisure products company, saw a nice upside reversal after finding support at the 21-day moving average. VTR, a medical sector stock, is vying for a breakout over a cup base, with strong relative strength and positive fundamental and technical factors.

Summary & Key Takeaways

  • The market experienced volatility driven by the two-day Fed meeting, but ultimately closed off the lows for the day.

  • The S&P 500, Dow, Nasdaq, and small caps all saw varying degrees of decline, but are still close to previous highs.

  • Rotation in the market continues to be a key theme, with the Nasdaq showing resilience and the Dow currently out of favor.

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