According to David Rosenberg, chief economist and analyst of Rosenberg Research and a lifelong Wall Street veteran, the market appears to be accepting the notion that growth won’t get any stronger than it is now. The prediction that economic growth will be strongest in 2021 isn’t far off the mark. For example, the International Monetary Fund predicts global growth of 6% in 2021, followed by 4.4 percent in 2022. What’s unusual in recent months is that the stock market has reflected that sentiment as well.
What to Expect If “Peak Everything” Has Already Happened and Markets Are Feeling Gravity Again
Rosenberg has created his own charts based on the major topics. His “stay at home” index, which includes food retail, hypermarkets, home improvement, internet retail, appliances, computers, trucks, wireless telecom, and interactive media in the S&P 500 SPX, +0.75 percent, is flattening.
The S&P 500 energy, packaging, chemicals, steel, copper, building materials, construction, electrical equipment, machinery, road and railroads, commercial services, professional services, consumer discretionary, semiconductors, media and movies and entertainment index is also flattening. A “reopening index,” which covers S&P 500 airlines, apparel, hotels, restaurants, and leisure, aerospace/defense, and office, hotel, and retail REITs (real-estate investment trusts), is also reaching its limit.
The fact that the GDP recovery and reopening indexes are now treading water rather than breaking new highs, according to Rosenberg, “indicates that the market is coming around to the concept of’peak growth,’ with a lot of the reopening and recovery news fully in the price.”
His vaccination hope index, which comprises S&P 500 biotech, life sciences tools and services, and healthcare equipment, is one index on the increase. According to Rosenberg, this indicates that COVID-19 anxieties haven’t subsided despite rising concerns about the delta coronavirus variety both at home and abroad./n
Read More
