Wall Street sentiment has improved dramatically in recent days after Powell hinted that the Fed will take a cautious approach to ending up reducing or downsizing its bond-buying program that has helped keep long-term interest rates low. .
The index, which parses the file Very wizard (Very wizard) The market volatility indicator, demand for junk bonds, options trading and four more measures of investor sentiment, showed signs of fear just a week ago after indicating extreme fear last month.
Powell’s impoverished comments on inflation are arguably the most important reason for the rise in positive sentiment, especially since headlines about Covid-19 and Afghanistan aren’t good yet.
“I call this the Teflon market. Investors can shake all of these less-than-favorable developments,” said Jimmy Chang, investment director at the Rockefeller Global Family Office. “The Fed’s reduced choreography is about empowering the market.”
The S&P 500 and Nasdaq hit all-time highs on Monday before retreating slightly on Tuesday. The Dow is also not far from reaching its next record and the 36,000 mark.
It’s been a great month for stocks. The Dow has risen more than 1%, while the Nasdaq has risen about 4%. The S&P 500 gained nearly 3% in August and the blue chip index is now in a winning seven-month streak.
It seems that investors are more afraid of losing a new impetus to stocks. It is also encouraging that the market rally has expanded late with stocks from more value-oriented sectors, such as healthcare, utilities and real estate, which have made big gains.
But the best technologies like apple (AAPL), Facebook (FB) and Google owner Alphabet (GOOGL), which are trading near record highs, will probably not cool down soon either.
“I hope growth stocks continue to be our oasis in the political chaos that is spreading around the world,” Louis Navellier, chief investment officer at Navellier & Associates, said Tuesday.
“The money has to go somewhere and because of the very low interest rate environment, millions of new investors are turning to the stock market, looking for higher returns,” he added.
In other words, the recent resurgence of the market is another example of the so-called TINA phenomenon on Wall Street. Unless you are interested in volatile cryptocurrencies or meme stocks like AMC (AMC), then “No Alternative” for non-US capitalized investors with US capital.
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