Stock market bears get a shot in the arm. A new virus strain is the bad-news catalyst sinking stocks worldwide. Yet, it comes as investor sentiment was quite bullish and positioning was extended. For the last two weeks, Horizon Investments’ Market Notes compiled the ways investors were putting themselves in a precarious position: PIIGS Fly and Other Stories of Investors Reaching for Risky Bets and Record High S&P 500 Ignites Unhealthy Retail Investor Interest. Add to that the record streak of bullish positioning in the weekly survey from the National Association of Active Investment Managers. Never before has it been above the 100 level for five weeks in a row!
Stay away. The news out of Europe is distressing; a new strain of the virus spreads more easily than before. That’s prompting governments in Western Europe and Canada to close their borders to British travelers during the holiday season. The S&P 500 opened about 1.2% lower than Friday’s close, essentially erasing last week’s gain. But greater pain is being felt in the trades that are more geared to global growth, including small-caps, value, and European equities.

What matters now? Based on cross-asset price action Monday — and the number of out-of-office replies flying around Wall Street email servers — we believe this is a correction in a market that has gone straight up since early November. Most importantly, it appears existing vaccine technology is effective against this new strain of the coronavirus. Those are the factors we are paying attention to, not the short-term hit to economic growth. And in case it was buried in the sea of red ink this morning, Congress agreed on a stimulus package worth about $900 billion, just the bridge the economy needs to get through what appears to be a difficult winter.
Speak up! With 4Q winding down, it’s time for Horizon Investments’ very short quarterly advisor survey. Here’s the link to let us know what challenges you face and how we can help.
Taking a holiday. Horizon’s Big Number and Market Notes will be on vacation this week and next, and will return in 2021. We wish you and yours a very happy holiday season!
Related stories:
PIIGS Fly and Other Stories of Investors Reaching for Risky Bets
Record High S&P 500 Ignites Unhealthy Retail Investor Interest
Momentum’s No Longer the Stock Market King, Vaccine Will Raise New Leadership
It’s Getting Harder to Fund Retirement Using Bonds
7.9 Trillion Reasons Not to Fight the Fed, ECB, BOJ or BOE
How Can You Reduce Longevity Risk for Retirement Investors?
This commentary is written by Horizon Investments’ asset management team. Please reach out to Chief Investment Officer Scott Ladner for interviews at 704.919.3602 EXT-3602 or sladner@horizoninvestments.com.
To download a copy of this commentary and the chart of the week, click the button below.

To discuss how we can empower you please contact us at 866.371.2399 ext. 202 or info@horizoninvestments.com.
Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. It is not possible to invest directly in an index.
Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. Opinions expressed herein are our opinions as of the date of this document. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent.
Other disclosure information is available at www.horizoninvestments.com.
Horizon Investments and the Horizon H are registered trademarks of Horizon Investments, LLC
©2020 Horizon Investments LLC
Insights
Out Over Their Skis, Investors Get Hit by Mutating Virus
Stock market bears get a shot in the arm. A new virus strain is the bad-news catalyst sinking stocks worldwide. Yet, it comes as investor sentiment was quite bullish and positioning was extended. For the last two weeks, Horizon Investments’ Market Notes compiled the ways investors were putting themselves in a precarious position: PIIGS Fly and Other Stories of Investors Reaching for Risky Bets and Record High S&P 500 Ignites Unhealthy Retail Investor Interest. Add to that the record streak of bullish positioning in the weekly survey from the National Association of Active Investment Managers. Never before has it been above the 100 level for five weeks in a row!
Stay away. The news out of Europe is distressing; a new strain of the virus spreads more easily than before. That’s prompting governments in Western Europe and Canada to close their borders to British travelers during the holiday season. The S&P 500 opened about 1.2% lower than Friday’s close, essentially erasing last week’s gain. But greater pain is being felt in the trades that are more geared to global growth, including small-caps, value, and European equities.
What matters now? Based on cross-asset price action Monday — and the number of out-of-office replies flying around Wall Street email servers — we believe this is a correction in a market that has gone straight up since early November. Most importantly, it appears existing vaccine technology is effective against this new strain of the coronavirus. Those are the factors we are paying attention to, not the short-term hit to economic growth. And in case it was buried in the sea of red ink this morning, Congress agreed on a stimulus package worth about $900 billion, just the bridge the economy needs to get through what appears to be a difficult winter.
Speak up! With 4Q winding down, it’s time for Horizon Investments’ very short quarterly advisor survey. Here’s the link to let us know what challenges you face and how we can help.
Taking a holiday. Horizon’s Big Number and Market Notes will be on vacation this week and next, and will return in 2021. We wish you and yours a very happy holiday season!
Related stories:
PIIGS Fly and Other Stories of Investors Reaching for Risky Bets
Record High S&P 500 Ignites Unhealthy Retail Investor Interest
Momentum’s No Longer the Stock Market King, Vaccine Will Raise New Leadership
It’s Getting Harder to Fund Retirement Using Bonds
7.9 Trillion Reasons Not to Fight the Fed, ECB, BOJ or BOE
How Can You Reduce Longevity Risk for Retirement Investors?
This commentary is written by Horizon Investments’ asset management team. Please reach out to Chief Investment Officer Scott Ladner for interviews at 704.919.3602 EXT-3602 or sladner@horizoninvestments.com.
To download a copy of this commentary and the chart of the week, click the button below.
To discuss how we can empower you please contact us at 866.371.2399 ext. 202 or info@horizoninvestments.com.
Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. It is not possible to invest directly in an index.
Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. Opinions expressed herein are our opinions as of the date of this document. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent.
Other disclosure information is available at www.horizoninvestments.com.
Horizon Investments and the Horizon H are registered trademarks of Horizon Investments, LLC
©2020 Horizon Investments LLC