On Monday, May 24, 2021, the stock market got a boost as technology stocks went up as well as stocks that benefit from the economic reopening. Several indexes have benefited from this rise as the Dow Jones Industrial Average went up 250 points, the S&P 500 went up 1.2%, and the Nasdaq went up 1.6%.
Many investors are still worried about the inflation currently going on, but seeing these gains and recovery points toward it receding, if only temporary.
Information technology, communication services, and consumer discretionary were some of the sectors in tech that are seeing a stock boost with some of the winners being Alphabet Inc, Microsoft, and Facebook which all went up more than 2%. Cryptocurrencies have seen a resurgence after a rough month as Bitcoin shot up 14% from $32,000 on Sunday to $38,000 and Ethereum went up more than 20% to be worth over $2,400 a coin.
In light of these gains, some in the tech industry remain bullish as the Managing Director of WedBush Securities Dan Ives said in an interview that he recommends that investors diversify their portfolios.
News that you will see become more common in the coming weeks is the news of COVID cases going down and the economic recovery that comes from it. Airline companies have seen new boosts recently as American Airlines and United Airlines are trading 1% higher since reopening began and Norwegian Cruise Line rose 2% after the company announced that it’s returning to the United State in the summer.
National Accounts Committee has finalized GDP growth estimate & GDP growth is estimated at 3.94%.This reflects the success of our govt's economic policies while managing COVID 19 pandemic. Our V-shaped recovery is balanced between 3 major sectors: agriculture, industry & services
— Imran Khan (@ImranKhanPTI) May 21, 2021
COVID cases have dropped to their lowest level since June 2020 according to data from John Hopkins University which also states the new seven-day average for new infections is about 26,000 cases.
On the Rise
As mentioned briefly, many tech companies have been seeing a big boost from the likes of Nvidia getting a lot of attention for their graphics cards and new A.I. tech to Veeva, a cloud computing company that helped a lot of pharmaceutical businesses like Pfizer. People have become a lot more confident in going out and purchasing as retails Target and Walmart have said that consumers have started to behave a lot like before; buying like before and buying new clothes.
With all this good news, there must be a reality check that comes along with it and several experts have provided that.
Reigning in Expectations
While economists acknowledge the good news, many have encouraged investors to keep their expectations in check as Goldman Sachs Chief Economist Jan Hatzius said in a note “…the biggest question is whether the economy will overheat, i.e. whether output and employment will rise [above] potential.
My mood goes up and down like the stock market 📈. pic.twitter.com/Ky2uWqUp44
— Mr. Archive (@meedmane) May 23, 2021
Hatzius later goes on to say it’s important to consider employment numbers when thinking about economic output because “growth is likely to slow from its current [pace]”.
Adam Crisafulli, the founder of Vital Knowledge a stock market news site, said “We think the choppy/sideways trend will continue for a bit longer, and the market will experience sell-off scares along the way.”