Not Even Pretending To Rally

“The shortage of skilled workers is now so serious that it is dramatically slowing down our economy,” – Christian Duerr, Leader of Free Democratic Party in German Parliament

The quote above illustrates that shortages of labor are not just an issue facing the US economy as aging populations, an acceleration in retirements and closed borders due to COVID shrink the available pool of labor in many countries. While not necessarily a concern in the present moment, these trends are long-term challenges facing advanced economies as birth rates around the world decline.

In markets today, unlike the last two days where futures traded higher only to reverse lower throughout the trading day, they aren’t even pretending to rally as all three major indices are firmly in the red. Equity markets are currently trading at extreme short-term oversold levels, but it’s going to be hard to convince investors to take a stand on the market heading into the weekend.

Image Source: Pexels

This year’s sell-off in the Nasdaq is really starting to rank up there in terms of the worst starts to a year for the index in its history. With a decline of 9.5% YTD, it is one of only six years where the index has been down more than 5% in the first 20 days of the year and the third sharpest YTD decline ever. The only two years that experienced a sharper YTD decline were 2008 (-11.8%) and 2016 (-10.7%).