Week of February 1, 2021

Greetings!  

We hope you had a nice weekend and are well and safe.

Last week all the buzz in the markets was around GameStop stock and the effects it had on market volatility.  Our weekly update explains the events of last week.  A few key takeaways:

• Last week's volatility is evidence of a fragile market looking for any excuse for an overdue price correction.  Sure, there was likely concern in some trading platforms breaking down and problems with the market mechanism  being able to execute trades in an unhindered timely fashion.  To the extent that the retail investor has been a big part of the market's rise thus far, there may be some valid concern on these platforms freezing up.
• As we have said time and time again, when any event like last week occurs, you have to ask the question of just how much  any such event might impact corporate earnings to justify such a down move in price. To last week's events, the answer is a big ZERO.  Is there a multiple adjustment for concern over the market mechanism?  Perhaps, but in the end these problems can be corrected rather quickly.  
• We remain focused on the vaccine rollout, earnings announcements, and this week's progress toward a third round of stimulus.  

Our weekly update is linked below.

The FMA Advisory Team