The big discussion not only in the markets but also in politics is whether the new round of stimulus will overheat the economy.
Bank of America’s research investment committee has said it will not do so and is bringing some new data to the table. First, he cited data from the Census Bureau showing that of households that received a $ 600 incentive check in the first half of February, 73% saved or paid off debt. Consumer credit also fell unexpectedly in January.
Bank of America also surveyed more than 3,000 people to ask how they would spend the new stimulus control. Even in the lowest income category, 53% say they intend to either save, pay off debts or invest.
So what does this mean for investors? Bank of America says it relies on nothing more than a temporary return to inflation. Supply disruptions will be alleviated as the workforce returns to work, plus progress in artificial intelligence and automation could mean fewer industrial jobs to return to. If wage growth accelerates, companies can afford to accelerate research and development.
The Research Investment Committee recommends what it calls prudent returns for bond allocations – high-yield corporate and municipal bonds, leverage, preference shares and convertible bonds have all outperformed the bond market. For shares, it is said that you buy a small-cap increase when it falls, and Nasdaq Composite COMP,
at 11,600 (which is 12% below Tuesday’s close).
The financial sector is his favorite sector, as he can win in both directions. If Bank of America’s inflation analysis is wrong, banks would benefit from a steeper yield curve and higher housing and lending activity. If it is correct, banks would be attractive, given higher share repayments and attractive returns.
Buzz
The House of Representatives is due to vote on the $ 1.9 trillion stimulus plan already approved by the US Senate, at which point it will head to the White House to sign President Joe Biden. The Congressional Budget Office estimates that $ 1.1 trillion will be spent in 2021.
US consumer price data for February will be the focus of a market suddenly obsessed with the outbreak of inflation.
Maryland has become the latest state to relax many of its COVID-19 restrictions.
The United States and China are discussing sending their top diplomats to Alaska in an attempt to reset relations for the Biden administration, according to the South China Morning Post.
Pfizer PFE,
and BioNTech BNTX,
agreed to provide the European Union with an additional 4 million doses of coronavirus vaccine.
Roblox Corp. has secured a reference price of $ 45 per share on the New York Stock Exchange as the intercenter gaming platform prepares to go public on Wednesday through a direct listing.
Luxury home builder Toll Brothers TOL,
reported a 70% increase in first quarter profit.
Market
After the large increase in stocks and technology bonds, it began to seem calmer. US ES00 futures,
NQ00,
decreased slightly and the yield on the 10-year Treasury TMUBMUSD10Y,
limited to 1.56%.
Bitcoin futures BTC.1,
went up over $ 55,000.
Chart
Bernstein Research’s portfolio strategies divided the business cycle into four different parts and tested how well different factors of investment style did. Stocks did best in the current part of the “recovery” of the economic cycle.
Related story: Here’s what the 2016 value rally has to say about how far the current advance can go
Random readings
The warning issued by John Oliver in 2018 to Meghan Markle before her wedding to Prince Harry proved to be money.
Dr. Seuss’s discontinued books sell for thousands of dollars in Canada.
It will be a Hollywood movie made from the true story that a bear used cocaine worth a duffel bag. For any bear reader of this newsletter, it didn’t end well.
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