Which Stocks Will Rebound in the Post-pandemic Era?
The market believes that the panic caused by Omicron will eventually calm down. Investors are turning their attention to the possible end of the outbreak as the fatality rate in Omicron dwindles.
The Main Contradiction
In the past two years, the main contradiction of the US economy is that the fiscal deficit has driven household consumption. Consumption has not only driven US corporate orders and capital expenditures, but also China's exports, and has exacerbated global supply chain problems. If there is no succession of a new round of industrial cycle or a new round of financial cycle, this mainline is likely to fade away and return to the original appearance of the economy.
The new drivers of economic growth after the pandemic are companies with the world's most advanced technologies leading a new round of industrial cycles, such as new energy, biomedicine, high-end manufacturing, and the digital economy that have started a new round of production capacity investment cycles.
Tech Allocation
Most institutional investors are shifting their holdings from technology stocks to companies such as energy that could benefit from the reopening of the economy. Global fund managers' allocation to technology stocks has fallen to the lowest level since 2008, according to a Bank of America survey.
What Analyst Says
Oanda market analyst Craig Erlam said investors need to keep an eye out for slowing corporate earnings momentum and a hawkish Fed: There are a number of different factors driving the market’s current shift, but it cannot be attributed entirely to the expectation that the COVID-19 pandemic is coming to an end.
For different views on the market, Christopher Harvey, head of equity strategy at Wells Fargo concluded: The market theme this year is normalization, it's all about spending, risk, valuation.
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As travel resumes, all travel related stocks will come back:
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