Stocks could face turbulence and limited gains in the second half of the year, as the Covid-19 pandemic continues to set the course for markets and the economy.
Emanuel said the fact that institutions have put more money into stocks recently means they are no longer underinvested and compelled to buy. "That's different than what we saw in May and the first several weeks in June," when they had to chase performance, he said.
Besides the uncertainty surrounding the virus, markets also face uncertainty as the presidential election approaches. Currently, the polls show former Vice President Joe Biden in the lead, ahead of President Donald Trump. Some political strategists believe there is a chance that a strong showing by Biden and the Democrats could resultEd Keon, chief investment strategist at QMA, said the market may not react to the November election until after the summer.
"Although the Nasdaq hit a new high and has been on a spike, less than 50% of its constituents are trading above the 200-day moving average. That's the biggest divergence since 2001," she said. "There are 45% of the Nasdaq trading above the 200 day moving average in a a rally that's been epic." Sonders said the virus will steer stocks through the end of the year, and even with reopenings, the virus could still influence consumer and corporate behavior.
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