Following unprecedented government intervention, the US equity market has rebounded over 70% from lows experienced less than year ago.
It has been a classic cyclical recovery as financials took an early lead as the economy and capital markets pulled back from the brink. Other economically sensitive groups such as consumer discretionary, technology, basic materials and industrials then assumed responsibility for the market’s upward move. With the market pricing in a better economy, the threats arise from the one side in which government support is removed too abruptly, or the other side from too much stimulus being applied, resulting in an overheated inflationary environment. Government fiscal and monetary support is ...
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