Tech beats cyclical stocks while treasuries rally
BNN Bloomberg
Stocks fluctuated as investors weighed uncertainties about a fourth wave of the pandemic in Europe and news that the U.S. House passed President Joe Biden’s economic plan.
Stocks fluctuated as investors weighed uncertainties about a fourth wave of the pandemic in Europe and news that the U.S. House passed President Joe Biden’s economic plan.
The technology-heavy Nasdaq 100 outperformed other major benchmarks, while economically sensitive companies such as energy, financial and industrial shares fell. Cruise ship operators, airlines and other companies that stand to benefit from a return to normalcy tumbled. The dollar briefly pared gains after reports Germany doesn’t plan on a national lockdown -- for now at least. Treasuries climbed.
“Cyclicals are trading under pressure amid a rotation back into tech as COVID lockdown concerns rise,” said Fiona Cincotta, senior financial markets analyst at City Index. “Austria has re-imposed full lockdown restrictions as COVID cases jump. Germany also recorded a record number of cases.”
While global stocks hover near records, propped up by robust U.S. corporate earnings growth, a resurgence of the pandemic, however, could stall the economic recovery. Many major asset managers expect markets to continue climbing into next year, albeit at a less enthusiastic and more volatile pace, as inflationary pressures gradually ease.
Traders are bracing for more volatility, with Friday’s options expiration forecast to be the second-biggest in recent history.
