Potential for a very strong second quarter of 2021
Updated: Apr 7
Following the passing of the Biden Administration’s enormous stimulus program riak markets have rallied hard over the last week.
Technology names have generally underperformed because the market is still worried whether the Fed will do anything more to control long bond yields. We will have our answer on the 17th of March.
There could be some risk that risk aversion increases after 17th March. My guess however is the Fed will say something to calm market concerns on that front and we have ongoing confidence in business earnings (due stimulus) but also really attractive discount rates for high growth businesses (ie fast growing but still unprofitable technology names).
If the Fed steps in to control long tenor bond yields alongside the US Government's huge stimulus program underwriting economic activity then the second quarter of 2021 could be a really strong market environment for risk assets.
This article is based on publicly available information considered reliable however it is not a personal recommendation nor does it consider any particular investment objectives, financial situations or needs. To the extent this constitutes general advice, this advice is provided by Balmoral Asset Management as part of providing an information service. This information service is not for the purpose of providing financial product advice. Readers should consider their own circumstances and, if appropriate, seek professional advice, including tax advice, before acting.