Another week of booming U.S. economic data and strong corporate earnings, including blowouts by some of the world’s largest technology companies, is in the books, yet stocks still managed only a mixed performance, feeding fears that market participants have already priced in a post-pandemic economic boom.
Monthly performance was nothing to sneeze at, with the S&P 500 rising 5.2% in April for its strongest month since Novembe. The Nasdaq’s 5.4% rise for the month was the strongest since December. The Dow rose 2.7% in April. Travel and leisure stocks and some other consumer-oriented parts of the market “can still do extremely well,” she said. Add in President Joe Biden’s infrastructure spending proposals and there’s room for industrials as well as clean energy names, which have already done well, to benefit, Krosby said.
The 12-month forward price-to-earnings ratio for the Russell 2000 stood at an 18-year low versus the Russell 1000 at the end of March, Malik noted, and record inflows into equity funds over the past five months have gone almost solely to large-cap stocks while small-caps have seen marginal outflows. Investors overall seem unfazed by Biden’s call for personal income tax hikes on the wealthy and a rise in the corporate tax rate. Stock market performance over Biden’s first 100 days in office, which ran through Thursday, was among the best of any presidency.
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