Global stocks tied to an economic recovery continue to rally. Here’s how long Wall Street thinks it can last
People are walking by the New York Stock Exchange (NYSE) building during Covid-19 pandemic in Lower Manhattan, New York City, United States on May 26, 2020.
Tayfun Coskun | Anadolu Agency | Getty Images
Analysts at Goldman Sachs, Bank of America and Barclays all believe that a sharp rotation into cyclical and value stocks could continue in the short term.
The Dow Jones Industrial Average dropped by 300 points on Tuesday, but overall, world stock markets are showing a broad rally despite ongoing concerns about the economic impact of the coronavirus pandemic.
Cyclical stocks are those tied to the economic cycle. So, as growth improves, cyclicals’ profits and stock performance tend to increase, and vice versa. Value stocks are those thought to be underperforming and, therefore, are considered underpriced.
Market participants appear to be tentatively pricing in a broad economic rebound as …continued .
[Source: CNBC News]