As we discussed in today’s Morning Lineup, the major headline of the day is the announcement of new lockdowns in Austria and other parts of Europe as case counts have risen sharply there recently.  You can see the big spike in case counts in Europe in the chart below.  We track a number of different Covid metrics in our daily Morning Lineup for Bespoke Premium subscribers.

The news of rising case counts and potential lockdowns appears to have impacted stocks in a pretty big way today.  In the chart below we broke the Russell 3,000 into deciles based on stock performance during the initial “COVID Crash” that occurred last year from 2/19/20 to 3/23/20.  The first decile of stocks is comprised of those stocks that were hardest hit during the COVID Crash last year.  As shown, this group of stocks is easily down the most today with an average decline of more than 2%.  Moving across deciles, the stocks that held up better during the Covid Crash are also performing better today.  That being said, every decile is in the red, but the first decile is the only one down by more than 1%.

Taking a look at industry groups, Energy, Retail, and Media and Entertainment stocks are the ones whose stocks are down the most on average today.  Energy stocks are the worst of these with a 4.4% average decline.  On the other hand, Household & Personal Products, Semis, and Utilities are the only industries whose stocks are in the green on average.

Given Energy is the weakest industry group, crude oil is also getting hit hard with a drop of 3.67% today. While crude oil began rolling over late last month, today’s drop marks the steepest one-day decline since July 19th. That leaves WTI futures at $76.11, which is the lowest price since the start of October.  Crude is also back below its 50-DMA for the first time since September.

As for how that plays into prices at the pump, in the second chart below, we show the year-to-date change in the national average price for gasoline from AAA this year as well as on average from 2005 through 2020. As shown, historically Labor Day through the end of the year has typically marked the point in the year that prices experience a seasonal decline.  This year, though, prices have rallied right through November and have only just now started to plateau.  Click here to learn more about Bespoke’s premium subscription services.

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