Optimism on the Vaccine Rollout
Johnson & Johnson took the final steps to position its COVID-19 vaccine for approval, allowing President Joe Biden to accelerate his timeline for getting shots available for all Americans to May.
New cases in the U.S. have leveled off at a still high rate of 70,000 per day. The coming weeks will be critical as an increasingly vaccinated or previously infected population faces new variants.
Optimism on the vaccination front drove a partial reversal of the “stay at home” trade, with value and physical economy stocks outperforming for the month. Several high valuation stocks popular with retail traders retreated, headlined by Tesla, which is now down modestly for the year.
For some companies, ultra-low interest rates have served as a justification for ultra-high valuations. With interest rates ticking higher, these stocks may face further pressure.
Stimulus Package Nearing Passage
A legislative stimulus packages advanced through Congress and is close to passage. Eligibility for direct stimulus checks is likely to be tightened to an income level around $160,000 for couples.
Still, increased likelihood of passage of a massive bill supported equities.