VOO Stock – U.S. Stock ETFs Slide on Doubts Over the Economic Recovery
U.S. markets and stock exchange traded funds dropped Wednesday on slowing U.S. business activity and concern that the deadlock in Congress over additional fiscal relief could hinder a speedy economic recovery.
While aggressive stimulus measures helped fuel the U.S. market rebound from the coronavirus-driven plunge into March lows, uncertainty over the next relief package has weighed on equities this month.
Jason Pride, Chief Investment Officer of private wealth at Glenmede, warned that the economy is leveling off at about 80% of activity before and won’t get back to normal until a vaccine is in place, Reuters reports.
“We’re at that phase where it’s harder to get that next bit of the recovery, that next bit of the reopening in place,” Pride told Reuters. “We’re still doing it, but the progress is way slower than it was in the first three months of the reopening.”
Meanwhile, Federal Reserve Chair Jerome Powell said Wednesday that the central bank was not making any “major” changes to its Main Street Lending Program, adding that both the Fed and Congress need to “stay with it” to support the fledgling economic recovery.
“The longer we go without more stimulus, the harder it will be to sustain the gains in the economy,” Willie Delwiche, investment strategist at Baird, told Reuters.
IHS Markit also showed gains at factories were pared down by a slowdown in the broader services sector in September, which pointed to a loss of momentum in the economy as we are heading into the colder months of the year when the traditional flu season hits.
For more information on the markets, visit our current affairs category.