As 2021 approaches, watch out for a Y2K-style stock-market correction, says strategist

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Investors need to brace for a bumpy start to 2021 if we close out the year with stock-market records, this strategist says. 'Investors need a reminder that even during major bull market runs, one can see significant setbacks.'

Welcome to the last trading week of 2020, a year we can’t see the back of fast enough. Stocks are higher after President Donald Trump signed that $900 billion stimulus bill, despite 11th hour demands for bigger relief checks.

“Market historians looking back to another incredible year—1999—in which the S&P 500 closed the year at a new all-time high, will recall that the initial few days of the year 2000 saw a vicious correction. Yes, times were different, and the focus then was on Y2K and the concentrated bubble of the time, but investors need a reminder that even during major bull market runs, one can see significant setbacks,” Hardy said, in a note to clients that published Monday.

Alibaba BABA, +0.34% 9988, -7.98% upped its stock buyback program from $6 billion to $10 billion, but shares of the e-commerce giant fell nearly 8% in Hong Kong, continuing to suffer from an antitrust probe by Chinese regulators. Over the weekend, authorities also demanded online finance platform Ant Group, of which Alibaba owns a 33% stake, clean up its business and present a plan for that, after suspending its stock debut last month.

 

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