Stock Market Forecast for the Week Ahead: Will Risk Appetite Recover?
2021-05-16 12:00:00
Peter Hanks,
Strategist
Stock Market Forecast for the Week Ahead: Neutral
The Dow Jones, Nasdaq 100 and S&P 500 will look to recover from last week’s turbulence
Inflationary fears have pressured risk appetite across asset classes and traders will look to the upcoming Fed minutes for further insight
Stock Market Forecast for the Week Ahead
The Dow Jones, Nasdaq 100 and S&P 500 endured considerable volatility last week as the three indices declined roughly -1.1%, -2.3% and -1.4% respectively. White-hot inflation data was largely to blame for the initial wave of selling as investors reassessed the Fed’s policy path given new economic readings. As the week progressed, disappointing retail sales and consumer confidence data helped to soothe hawkish fears and the indices were able to close the week off the lows.
Value stocks have gained steam in recent months as an economic recovery sits in sight.
Rob Arnott says value stocks in the UK and emerging markets are the most attractive.
The founder of Research Affiliates called them potentially the trades of the decade.
In 2019 and 2020, the COVID-19 pandemic sunk stock prices around the world as the global economy shut down.
Anticipatory and brave investors seized opportunities in cyclical and cheaper value stocks as recessions and bear markets briefly took hold.
These became consensus trades, however, since multiple effective vaccines were discovered at the end of last year, sending stocks especially economically-sensitive ones soaring. Read research from just about any market strategist at the major banks, and you ll find they re all bullish on the recovery trade.
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The record-setting stock market has further upside ahead with depressed consumer confidence spring-loaded for a recovery, says a Wall Street chief strategist
The record-setting stock market has further upside ahead with depressed consumer confidence spring-loaded for a recovery, says a Wall Street chief strategist
Ben WinckFeb 14, 2021, 20:53 IST
Drew Angerer/Getty Images
James Paulsen, chief investment strategist at
The Leuthold Group, said.
Vaccine distribution and fresh stimulus stand to lift spirits among everyday Americans in the coming months.
History shows that broad market strategies outperform the S&P 500 when sentiment improves, Paulsen said.
The stock market s next leg up will have more to do with Main Street optimism than Wall Street bullishness, according to James Paulsen, the chief investment strategist at The Leuthold Group.
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