Have we woken up to the stock market in 2021 with a full economic recovery well under way and a Coronavirus vaccine being administered to the many?
With a shifted focus on the global recovery from the Coronavirus pandemic, the post Memorial Day weekend markets has been strong and has us asking the question if investors are already looking at 2021 markets and building this in to stocks today.
Starting the post bank holiday weekend with all 3 key U.S. indexes up alongside those of the UK and most of Asia investor sentiment is continuing down a bullish path.
The Dow is fairing best of the US indexes making gains of more than 2 % and time of writing and this just seems a far cry away from the current economic data we are looking at.
The current economic data is still gloomy. Unemployment is at 14.7%, which is the worst since the Great Depression and almost 20 million jobs in the US have been lost due to the pandemic from the low levels experienced prior. Will these jobs return as industry kicks into gear?
There is a broadly similar pattern worldwide but the investor sentiment is taking every positive in the current market conditions and running with it so we may still be in 2020 but stock markets are very much already in 2021.
Strategists have linked the strength of the markets this week to investors looking at the ‘inevitable’ global recovery in 2021, but are they jumping the gun, and being too optimistic of the current global situation and ignoring the signs?
With so many of the variables still vastly unknown and consumer sentiment still heavily dampened, we may be moving too far into bullish territory for our liking with even the 2021 picture hazy at this point in time.