The rally paused in May, however, thanks to uncertainty regarding inflation, the labor market and when the Federal Reserve would begin to reduce, or taper, its quantitative easing (QE) program. These positive factors helped stocks rally throughout the month, as the S&P 500 hit a new record above 4,200 during the final days of April. Finally, first-quarter corporate earnings were very strong, as most U.S. That continued “safety net” gave investors confidence in the future economic outlook and the sustainability of the economic recovery. Meanwhile, the Federal Reserve reiterated its support for the economy and promised not to remove any accommodation in the near term. That served as a positive signal to investors that a return to pre-pandemic normal was now likely just a matter of time. ![]() The increased pace of vaccinations combined with a decline in COVID-19 cases helped numerous states more fully reopen their economies or prompted the announcement of plans to do so soon. At the same time, the number of new COVID-19 infections fell from approximately 77,000 daily new cases at the beginning of April to less than 60,000 daily new cases during the last week of the month. accelerated meaningfully with daily vaccinations hitting a peak of more than three million per day by the middle of the month. As highlighted by a recent Bank of America survey, markets are currently dominated by a consensus based on three core hypotheses: durable high global growth transitory inflation and ever-friendly central banks.īy embracing this positive view of the world, investors have pushed stocks and corporate bonds ever higher, stabilized government bond markets, and sidelined short sellers who bet on falling stock prices.Įarly in the quarter, the pace of vaccinations in the U.S. The S&P 500 had a strong second quarter thanks to numerous positive developments that led to a “Goldilocks” economic environment. Looking back at the second quarter of 2021 Part 3: A look ahead - our outlook for the rest of 2021 Part 2: What actions did we take in McKinley Carter portfolios in Q2? Part 1: Looking back at the second quarter of 2021
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