The U.S. Economy’s Rebound has no historical parallel.
The current rebound is unlike any in recent history. Consumers mainly power it with plenty of cash in extra savings. Businesses are ready to hire, and going back to normal is happening. The recovery will be different from the 2008-2009 financial crisis due to the robust economy going into the pandemic.
New businesses are opening at a faster pace than ever before. Home prices are up, and the indexes are up. The jobs report came in with over 500,000 new jobs. The employment rate is now below 6%. The unemployment benefits will end in 90 days, and with all the help wanted signs, employment should drastically improve. The rebound should continue.
The only damper could be inflation. The speedy turnaround has caused severe shortages in basic materials and raw materials. Inflation has raised its ugly head, and inflation may not be as transitory as the Federal Reserve believes. Inflation has risen by 3.3% in the leading economic areas since April of 2020. That is the most significant increase since 2008. The fear is that the overheating of the economy could result in a change of attitude from the Fed. This would mean that rates could rise sooner rather than later.
So my suggestion is to stay with quality stocks, don’t chase the MEME, and look at some commodity exposure. Still waiting for a cautious bull, but politics could have a negative effect.
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