The bond market has stabilized after a huge selloff, and that has given comfort to stocks. The technology-dominated Nasdaq Composite COMP, +0.12% has advanced for six of the last nine sessions, and the Russell 2000 RUT, +2.29% jumped 2.2% to take the small-cap index’s gains to 35% since the U.S. election.
First, to demography. The aging of the U.S. and developed world population will mean a loss of workers, and the aging of the population also is creating a surge in government spending. Pradhan also noted caring for the elderly will be labor intensive. “We need tech to destroy jobs in other parts of the economy so that the labor it releases can be reallocated into looking after the elderly, at a similar level of skill,” he said.
The Fed already is trying to address the challenge of coming inflation readings that, into May and June, may show 3.5% to 4% year-over-year gains. “I will tell you that anything above 3.5%-4% will create a significant breakdown in correlations [between stocks and bonds], because people have not seen inflation really in a big way in the advanced economies for the last 30 years,” he said.
The Ever Given container ship is still stuck in the Suez Canal, disrupting roughly $10 billion of trade a day. The Fed said temporary limits on dividend payments and share buybacks will end for most banks after June 30.U.S. stock futures ES00, +0.17% NQ00, -0.49% were pointing to a quiet start as the yield on the 10-year Treasury TMUBMUSD10Y, 1.676% rose to 1.67%.
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