Investors are showing signs of a growing boom, expressing optimism about global recovery with vaccine fuels and the changing economy of the post-coronavirus world.
The Dow Jones industrial average rose 1.6% for the first week of 2021, marking the fourth straight weekly gain despite Wednesday’s U.S. Capitol storm move and a decline in nonfarm payrolls reported Friday .
The upturn, which brought the 30-stock index to 31000 in just 29 trading days, has been led by banks and energy companies. Bond yields have risen, bringing the 10-year U.S. Treasury pound yield to 1.105%, the highest level since March.
When economically sensitive sectors and bond yields rise together, it often signals that Wall Street is embarking on the classic reversal trade that anticipates a full-blown economic recovery. targeted. It is important because it can increase revenues, stronger company returns from sales to manufacturing to technology, and other market advantages.
But the blistering, stimulant rally over the past year could complicate that formula. While the case for economic recovery appears strong and many fund managers expect market progress to continue, skeptics say stocks remain vulnerable to falling from the pandemic, including still high unemployment and questions about the speed of vaccine distribution. There may be supercharged gains in funds from some favorable stocks to cryptocurrencies to some volatile products.