Oak Harvest has released our 2H2021 Market Outlook titled- “Let the Good Times Roll.” The Outlook can be read here:
Further data detail and additional videos and podcasts on the material will be forthcoming. Our initial podcast release of the Outlook can be found here:
While mindful of normal summer seasonally in both the economy and stock markets making for a 5-6.5% pullback possible at any time, we expect the S&P 500 will end 2021 over 4600, with even higher targets feasible as volatility continues to trend much lower in 4q2021 and 1q2022. Risks to our outlook lie primarily in another upturn in virus counts this summer and in 1q22 that would cause a economic slowdown just as supply chain inventories are being rebuilt.
The S&P 500 was up 2.7% as equity markets rebounded last week, undoing the damage and rotation prompted by the prior week by Federal Reserve taper talk. The tech-heavy Nasdaq also rallied 2.4%. Both indices are pushing gains around 10% over the past three months.
Stock wise, shoe and apparel brand Nike (“NKE”) sprinted past analyst estimates by a wide margin when they reported earnings on Thursday. CNBC commentator worries and recommendations to sell Nike in front of their quarterly report anticipating a weak China outlook proved ill-advised and wrong. Nike’s stock closed the week up over 16%, and at a new all-time high.
Ten-year Treasury yields rose 10 bps to 1.53%, which caused the yield curve to steepen slightly and made banks the best group last week. Banks gained 6.5% after declining due to a flatter yield curve the prior week. Energy was also strong, rallying 6.7% on continued strength in oil (WTI-West Texas Intermediate closed the week around $74). OPEC+ meets this week. While all sectors posted gains, defensives such as utilities and consumer staples brought up the rear.
Last Fridays Podcast: Second Half Outlook, Breakdown – Part One: It’s a Bull Market
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