Markets dip as sentiment “extended”

Markets were mostly lower on Monday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 fell 0.6 percent and the Shanghai Composite fell 0.2 percent.

A rise in COVID-19 cases across more than half of the US is keeping health experts concerned.

“I think the fall is going to be a bit of a mess,” said Dr Ashish Jha, director of the Harvard Global Health Institute.

Investment analysts, though, appear more sanguine.

“Over the course of the next eight weeks, we’re going to have a raft of announcements on a vaccine. If they are all positive, it’s going to trump everything,” said Quincy Krosby, chief market strategist at Prudential Financial.

Indeed, Sam Stovall, chief investment strategist for CFRA in New York, said that the new bull market that emerged from the February-March COVID-19 bear market could last three years.

Still, the bullish sentiment in the market has other analysts concerned.

“Retail enthusiasm for the market via commission-free trading apps plus the huge volatility earlier this year have led to a massive boom in options volumes,” analysts at Bespoke Investment Group wrote.

“In any event, the prevalence of call buying is in our view a clear-cut signal that sentiment is extended after a blistering equity market rally since March,” they added.