The stock market will be flying high in a year — for 2 simple reasons
Stock markets love to take everyone by surprise, and less than a year from now a very big surprise will have played out: Stocks will be a lot higher by June as the economy moves into overheat mode.
How do we get from the current grim state of affairs to this very different world? Two steps.
1. By the turn of the year we will have vaccines for COVID-19. They won’t be perfect. But they will be good enough at protecting the most vulnerable — so most people can get back to work and the economy can begin to repair.
2. By next June, the massive stimulus dumped on the economy by politicians and the Federal Reserve will have kicked in in full force, sending the economy into overdrive. That will push S&P 500 SPX, , Nasdaq Composite COMP, and the Dow Jones Industrial Average DJIA, much higher. Below I suggest specific stocks and sectors that will do the best, taken from my stock letter Brush Up on Stocks.
Barron’s:ADP Jobs Report Is a Stark Warning on the Economic Recovery That the Stock Market Is Ignoring
Sound far-fetched? You bet. And there are risks to my forecast. But the big market changes always come out of left field and take most people by surprise. Improbable, out-of-consensus bets are usually the best bets — as long as there is sound logic.
Here, we have it, for two reasons.
1. Vaccines are on the way soon
For help with vaccines, I turn to Jefferies JEF, biotech ...
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