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13 Jan, 2021 Author Brian ScheidPolo Rocha
The short-term outlook for the U.S. economy may be dark, but bond investors see a bright future.
The U.S. Treasury yield curve has steepened to levels not seen since 2016, signaling that investors expect economic expansion and higher inflation in the coming years as coronavirus vaccines are distributed and incoming President Joe Biden and a Democrat-controlled Congress are expected to pass another substantial stimulus package.
The steepening curve is likely a sign of economic recovery, said Michael Crook, deputy chief investment officer at Mill Creek Capital. It s very possible we re on track for a period of above-trend economic growth unlike anything we ve seen in the last two decades, but it won t happen all at once.
Momentum is building in Washington to break up Big Tech, including from Democrats, following the social media crackdown on President Trump and conservative voices.
Value stocks surge boosts 2020’s losers as investors bet on economic revival
Investors are weighing how much further a rally in value stocks can run, as expectations for greater fiscal spending under a Democrat-controlled Congress add momentum to the surging shares of companies that took a beating for most of 2020.
Shares of banks, energy firms and other economically sensitive companies climbed after the Democratic party’s recent victory in the Senate, adding to gains sparked by breakthroughs in vaccines against COVID-19 late last year.
The move in these so-called value stocks, which tend to trade at relatively low price-to-book values, has stood out even in a broader rally that has seen most segments of the markets advance and Treasury yields climb on hopes of an economic revival. The Russell 1000 value index has jumped 14.5% since early November, nearly triple the gain of its growth-stock counterpart, which is dominated by technology.
Analysis: Value stocks surge boosts 2020’s losers as investors bet on economic revival netscape.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from netscape.com Daily Mail and Mail on Sunday newspapers.