The S&P 500 fell 0.6 percent last week, its fourth consecutive weekly decline, matching the longest losing streak since August 2019.
Some investors are questioning whether the recent selloff in stocks heralds a longer period of volatility.
“The action that we have seen this week makes me less confident that this is a healthy correction,” said Willie Delwiche, investment strategist at Baird. “The lack of stimulus, the uptick in coronavirus cases, the tension coming out of D.C. overall lends to an environment that is going to be a little bit harder for stocks to remain relatively sanguine through.”
Wells Fargo head of equity strategy Chris Harvey thinks it is too risky to put new money in stocks right now.
Harvey cited uncertainties over the COVID-19 pandemic and the US presidential election as contributing to downside risks, although he remains “longer-term positive”.
In contrast, Nomura Asset Management Co-Manager of the Global High Conviction Fund Ilan Chaitowitz told CNBC last week that investors should stay the course.
Chaitowitz said that the recent uptick in COVID-19 cases should be treated as a seasonal phenomenon and investors should position for infection rates to “collapse” heading into spring.
Chaitowitz also said that progress on COVID-19 vaccines provide cause for optimism, as did Barclays analysts Ajay Rajadhyaksha and Amrut Nashikkar, who suggested that a vaccine is now a matter of “when, not if”.
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