Moving on up. Rates that is.
Rates are on the rise. While not the end of the world, this shift has certainly reintroduced volatility into the investment market. Everyone is working to adjust their portfolios for a future with higher inflation, growth and interest rates. This rotation has hit the high-flying tech sector, which has been the market leader for most of the past year, especially hard. There is a twofold reason why tech is taking the brunt of the recent pullback. First, straightforward profit taking. Second, the relative value of a future growth in earnings is not as attractive when rates are higher. That being said, rates are still realllllly low. In my opinion, the growth story is still intact given the amount of continued fiscal and monetary support that exists. Dive deeper on how, why and what it all means with this article by CNBC.
While still the dominant economic story, COVID-19 numbers have been drastically improving in recent weeks. There is hope this trend of dropping rates of infection and subsequent deaths will continue with increased vaccination efforts and consistent mitigation practices nationwide. Good news out just this weekend with the FDA emergency use authorization approval of Johnson and Johnson’s single dose vaccine.
U.S. economic outlook.
TD Ameritrade’s latest analysis of the vaccine rollout and what it means for the U.S. moving forward is here. Read on for lots of details on how the vaccination campaign could impact the economy in the future.