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“History doesn’t repeat itself, but it often rhymes.” – ???
On this day in 1835, Samuel Clemens aka Mark Twain, considered by many to be one of the greatest American writers, was born. While the quote above has often been attributed to Twain, there is no documented evidence that he ever said the last part of the quote. One variation he has written was “History never repeats itself, but the Kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.” Not quite as succinct but along the same lines.
Whoever said it, the fact that history doesn’t repeat itself, but it often rhymes is often on display in financial markets. While there’s no historical parallel to the current period of COVID and the unprecedented amount of stimulus that has been put into the system, human emotions are always a driving factor in market movements, and when faced with increased uncertainty, many investors choose to sell first and ask questions later- even if the headlines driving the market lower today (vaccines and COVID treatments potentially being less effective against the Omicron variant) were also in the market yesterday as well.
Equity futures are indicating a sizable decline at the open with the Dow leading things lower. The moves in the Energy and Treasury market have been even more notable with WTI trading under $68 a barrel, nat gas down over 6% after a 10% decline yesterday, and the yield on the 10-year down below 1.44% to its lowest level since late September.
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There’s been quite a bit of bifurcation in sector performance over the last several trading days. While four sectors are up over the last five trading days, they’re all among the smallest sectors in the market. At the bottom of the list, two sectors (Communication Services and Industrials) are down over 2% while another two are down more than 1.5% (Consumer Discretionary and Materials). Technology, the S&P 500’s largest sector is also down but by a more modest 0.68%.
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