By Debby
Hey moomooers, we're going to end a volatile but recovering week.
Investors still worry that interest rates and inflation would climb unexpectedly with the rollout of vaccines and stimulus plans.
Weekly market recap
For this week, the $Dow Inc.(DOW.US)$ gained 4.1%, recording another all-time high, and the $S&P 500 index(.SPX.US)$ rose 2.6%, booking a closing record.
While the Nasdaq broke its string of three straight weekly losses, it trailed the Dow yet again. The $Nasdaq Composite Index(.IXIC.US)$ advanced 3.1%, nearly 6% away from the all-time high.
The big picture of the market trends remained the same as investors became more cautious and alert to rising bond yields and inflation.
Investors continue to rotate out of tech stocks after a decade of outperformance.
Market experts who have been predicting a technology bubble crack believe this time was different.
"You’re going to see cyclicals and more defensive names continue the rally after we get past this period of adjustment," said James Sullivan, head of Asia ex-Japan equity research at JPMorgan.
Cyclical stocks are companies whose underlying businesses tend to follow the economic cycle of expansion and recession. Some of these include sectors such as finance, energy and industrial.
Defensive stocks — such as health care and consumer staples — typically provide consistent earnings and dividends regardless of stock market conditions.
Investors worried that interest rates and inflation would climb unexpectedly with the rollout of vaccines and stimulus plans.
Higher rates can dampen expectations for future profits, which finally hit stocks with relatively high valuations.
The 10-year Treasury rose to its highest level in over a year this week.
Source: YCharts
Here's a look at the returns of S&P 500 sectors year to date.
Source: jhinvestments
The week ahead in focus
Here are the most anticipated earnings releases, IPOs and economic events for the week ahead.
The earnings calendar and IPO calendar are sparse this week.
The few major companies reporting include online broker $Futu Holdings Limited(FUTU.US)$, cybersecurity technology company $CrowdStrike Holdings Inc(CRWD.US)$ and BSM service provider $COUPA SOFTWARE INC(COUP.US)$ on Tuesday, Chinese leading e-commerce platform $Pinduoduo(PDD.US)$ and American lending platform $Upstart Holdings, Inc.(UPST.US)$ on Wednesday.
Thursday will be more interesting as Nike, FedEx, and Dollar General report. Three IPOs will be listed on the same day.
China-based $Tuya inc.(TUYA.US)$ has set terms of its initial public offering, in which the China-based company, which says its mission is to build an internet-of-thing (IoT) developer ecosystem and enable everything to be "smart," could be valued at up to $11.2 billion.
The U.S. Federal Reserve is widely expected to keep its benchmark interest rate unchanged—and at a near-zero level—when it concludes a two-day meeting on Wednesday. Fed statements will be closely watched in the wake of a recent rise in bond yields, driven in part by inflation concerns.
Source: CNBC, Barron's, Jhinvestments
Comment(3)
Investors started to abandon tech darlings.
Will the trend continue? Share your thoughts with us.
$Nasdaq Composite Index (.IXIC.US)$$S&P 500 index (.SPX.US)$$Dow Jones Industrial Average (.DJI.US)$
nonsense. People are already buying on the dip. 20% down, buy some. And do not forget, many tech stocks are highly diversified, strong businesses.
Hog Wash. Here it is .Crypto .is no doubt the future of currency worldwide it's written. EV .AI. automation.non stoppable.is happening were in the whirlpool.plain as day. patience go slow it's going to be a yo-yo so we're in the most fantastic time ever hang on keep tight.enjoy the ride..I don't like one world order. I got to face it it's written.you can learn a lot from Revelations.
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