JPMorgan Billionaire Dimon applauds next ‘Boom’ – and S&P and Dow return near records

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Topline

As pundits envision an impending economic ‘boom’, stocks return to all-time highs on Wednesday as long-struggling cruising stocks push market gains up as tech companies continue to calm down – another a sign that the recent market reversal may continue as the earnings season increases. next week.

Highlights

Shortly after the market opened, the Dow Jones Industrial Average and the S&P 500, both of which closed at record highs on Monday, climbed around 0.3% and 0.1%, respectively, while the tech-heavy Nasdaq fell about 0.3%.

Big tech companies, which have significantly underperformed this year amid rising Treasury yields, continue to lag on Wednesday: Tesla, Microsoft and Apple all fell 0.6%.

Outperforming the market, the shares of the country’s three largest cruise operators are skyrocketing as companies gear up for a long-awaited return to cruising, with Norwegian Cruise Line, Carnival and Royal Caribbean Cruises up 4%, 3 % and 2.5%, respectively.

Other stocks rising on Wednesday included Victoria’s Secret parent company L Brands, water heater company AO Smith and Chipotle, which are up 2% to 3% each.

Meanwhile, shares of blank check firm Mudrick Capital Acquisition Corp. II kept their surge of 15% on Tuesday after the company announced that it had taken sports memorabilia company Topps on the stock exchange in a deal valued at $ 1.3 billion.

In his annual note to shareholders, billionaire JPMorgan CEO Jamie Dimon said on Wednesday that while stock valuations are “pretty high in almost every way”, an expected economic boom could justify the prices, echoing the sentiment of the big Goldman banks Sachs and Morgan Stanley, who recently touted the imminent recovery.

Crucial quote

“I am convinced that with excess savings, new stimulus savings, huge deficit spending, more [quantitative easing from the Fed], a potential new infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the US economy is likely to explode, ”Dimon said Wednesday. “This boom could easily last until 2023 because all spending could extend until 2023.”

Tangent

Fueling optimism on the monetary policy front, Dallas Federal Reserve Chairman Robert Kaplan told the the Wall Street newspaper Tuesday that it is still too early for the central bank to withdraw its support for the economy. Instead, he said the Fed should not raise interest rates or stop pumping more than $ 100 billion into the economy each month until inflation and full targets are met. employment in the country are achieved.

Key context

Massive fiscal stimulus, accommodative monetary policy and a boom in corporate earnings fueled huge gains for the stock market during the pandemic, but rising interest rates created headwinds for priced stocks high in recent weeks. This has hit the booming tech sector particularly hard, with the Nasdaq falling 11% from its February high. However, as interest rates slow, vaccination rates rise, and President Joe Biden announces another $ 2 trillion in economic relief, stocks are rallying again. The Nasdaq is now down just 3% from its February highs and the Dow and S&P have hit new highs this week.

To monitor

The first quarter earnings season begins next week, with major banks JPMorgan, Bank of America and Citigroup among the companies expected to release their reports starting Wednesday.

Further reading

JPMorgan’s Jamie Dimon predicts economic boom that could ‘easily’ last until 2023 (TBEN)

Energy stocks have beaten all other sectors so far this year, but analysts have split on the near-term outlook (TBEN)

Coinbase Reports $ 1.8 Billion In Revenue As Crypto Market Surpasses $ 2 Trillion (TBEN)

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