The U.S. economy may be reviving faster than many businesses can keep up with. Suddenly consumers are facing scarcities for everything from lumber to copper, computer chips to rental cars. Job applicants are scarce, too, in some rebounding sectors like restaurants.
Americans can expect more such shortages and price increases, economists say, as eager-to-spend consumers contemplate a post-pandemic economy and as record government stimulus boosts demand. The silver lining is that, while challenging for now, most of these shortages are expected to be temporary.
Why We Wrote This
The economic trend of recent decades has been abundance for U.S. consumers, built on globalization and supply-chain automation. For now, the story is looking very different, as shortages emerge for key products.
Analysis: Fund managers see value, cyclical stocks running further despite slow U.S. jobs recovery
05/07/2021 | 07:06pm EDT
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NEW YORK (Reuters) - While some technology stocks got a boost Friday after a disappointing U.S. jobs report, some portfolio managers say that blow-out earnings from several large technology companies over the last few weeks are not enough to keep making outsized bets on the sector.
Instead, those fund managers say that they are continuing to rotate into value and cyclical stocks - whose fortunes are closely tied to economic conditions - in anticipation that the economic recovery will be longer and more gradual than originally anticipated.
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Synopsis
Though equities remain near all-time highs, some sectors have gotten off to an uneven start this month, with the tech-heavy Nasdaq Composite down more than 2 per cent so far this week while the Dow Jones Industrial Average rose to a record on Thursday.
Agencies
Investors next week will be watching quarterly results from companies such as Walt Disney Co, Marriott International and Tyson Foods, as a first-quarter reporting season in which corporate profits have come in far higher than expected draws to a close.
Related
NEW YORK: As U.S. stocks head into a seasonally rocky stretch, investors are gauging to what extent markets have anticipated a number of factors that could sway asset prices, from massive government stimulus to looming inflation.