Get updates on recent capital market data and trends, including possible expectations for future outcomes.
Pension programs face demographic challenges as the percentage of workers at or near retirement grows. These challenges contributed to a gradual adjustment in fixed income allocations in pension portfolios.
The popular adage, “Sell in May and go away,” is popular because the May-to-October period is historically the weakest six-month stretch of the year, though May has been positive in seven of the last eight years. Given that the 30% return over the past six months has been among the strongest on record, a pause in the rally would not be unexpected or unhealthy.
The tailwinds that drove markets to records remain in play, including fiscal and monetary stimulus, vaccines, accelerating economic growth and upside to earnings. Strong fund flows and accelerating share repurchases are shifting the supply/demand metrics for equities.
Millennials are getting more comfortable with stock investing, but many continue to harbor a strong aversion to risk. How will the COVID-19 pandemic affect their attitudes and behavior toward investing?
Large caps continue to rebound relative to small caps over the past month (+7% vs. -1%), while growth is recovering relative to value (+10% vs. +4%). Participation in the rally is broad-based, with the equal-weight S&P 500 outperforming cap-weighted by 4% this year, while the largest percentage of companies are above the 200-day moving average since October 2009.
Many economists are currently forecasting strong growth for Q1 and 2021, driven mostly by government stimulus. A glut of savings from consumers could as fuel to this growth spurt.
