Last week's economic activity resolved in a directionless investment market. Despite continued better-than-expected corporate earnings, stocks initially retreated as concerns over rising global COVID-19 infections weighed on investor sentiment. A mid-week rally erased much of these losses, with reopening stocks and small cap companies leading the market. The latter part of the week showed market reaction to reports that President Biden supported a capital gains tax increase on wealthy Americans. The Biden news prompted worries that stocks could come under pressure this year if such an increase were to go into effect next year.
Solid economic reports, along with a reassessment of the capital gains news, helped stocks to bounce back and close out the week on a more positive note.
Here's what I'm reading this week:
BlackRock are sticking to a pro-risk stance and tweaking tactical views as the U.S. leads a powerful global economic restart and our new nominal theme plays out.
Stocks were little changed on the week as markets digested strong first quarter earnings reports and bond yields eased.
The Federal Reserve policy meeting will be in focus as markets look ahead to a potential tapering of its bond purchases to be signaled as early as June.
Capital Group provides an interesting analysis of Bitcoin and cryptocurrencies in general. The full analysis is worth a read. There is a comparison made to gold:
"Bitcoin has been likened to “digital gold,” and in some ways this is an apt analogy. Bitcoin is like gold in that it is not issued by the government or a private entity. It does not have a jurisdiction and its distribution is decentralized. As a store of value, both Bitcoin and gold are highly durable."
The Featured Wealth Management thought in this quarter's eNewsletter looks at possible tax changes that have bandied-about by the Biden Administration. There's no reason to pivot with your plan just yet, but these 10 ideas provide good food for thought.