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Some strategist on Wall Street have been warning that the recovery is already priced into stocks.
iShares Chief Investment Strategist Gargi Chaudhuri thinks otherwise.
She shared with Insider why cyclicals still have further to run.
Some of the more cyclical sectors of the stock market, like small-caps, have skyrocketed to new heights over the last six months, after multiple COVID-19 vaccine discoveries and a Democratic sweep in the 2020 election.
The steep run-up in the recovery-tied stocks has led some strategists to say the recovery is priced in by now, and investors should prepare to exit the early stages of the new
For now, though, the coast seems to be clear for stocks, according to Jordan Kahn, the chief investment officer at ACM Funds and comanager of the ACM Dynamic Opportunity Fund, which takes a long-short approach that s somewhat in the fashion of a hedge fund.
In addition to the gargantuan stimulus package that will be supportive of consumer spending, equity investors can rely on the fact that the global recovery is still in its early stages, interest rates remain low, and the Federal Reserve is committed to quantitative easing, Kahn told Insider on Wednesday.
He said he thought it would take several rate hikes from the Federal Reserve before stocks were hurt. As of now, it appears that the Fed will keep the federal funds rate near zero at least into 2022, if not longer.