After the rush to buy that sent U.S. stocks up more than 50% in five months, there is a growing debate about whether momentum can be sustained amid high valuations and uncertainties about the additional government assistance. High-frequency economic indicators and corporate earnings have improved, reinforcing optimism for recovery from a pandemic-induced recession amid ultra-easy monetary policy and massive stimulus measures.
“The largesse of the Fed means that there are trillions of dollars in excess liquidity seeking returns above the near-zero or even negative rates offered by fixed income,” wrote Win Thin, global head of foreign exchange strategy at Brown Brothers Harriman & Co. in New York. “A lot of it goes into stocks.”
Democratic and Republican leaders are hinting that they are looking for a way to revive stalled negotiations over the next round of pandemic relief for the US economy, even as the two sides remain far from any agreement. The Trump administration sees a possibility for Republicans and Democrats to agree on a smaller pandemic relief cycle totaling US $ 500 billion, which would omit the biggest points of disagreement, a senior said on Tuesday evening. American official.
Spurred on by the S&P 500 skyrocketing to a record Tuesday, the market cap of global equities is at an all-time high of US $ 89.7 trillion. Risk assets have rallied since March, as unprecedented stimulus and gains in tech stocks offset concerns over U.S.-China trade tensions and rising coronavirus cases.