{"id":9386,"date":"2021-03-08T23:21:24","date_gmt":"2021-03-08T23:21:24","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9386"},"modified":"2022-02-26T13:05:53","modified_gmt":"2022-02-26T13:05:53","slug":"vaccine-timeline-moves-up-inflation-questions-nasdaq-inches-toward-correction","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/vaccine-timeline-moves-up-inflation-questions-nasdaq-inches-toward-correction\/","title":{"rendered":"Vaccine Timeline Moves Up, Inflation Questions, Nasdaq Inches Toward Correction"},"content":{"rendered":"\n<p>In today\u2019s Steady\nInvestor, we take a look at key factors that we believe are currently impacting\nthe market, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Increased\nvaccine availability by May?<\/li><li>Are inflation\nworries overblown?<\/li><li>Nasdaq flirts\nwith correction territory<\/li><li>Consumers\nhave saved trillions during the pandemic. Are they poised to spend it?<\/li><\/ul>\n\n\n\n<p><strong>Vaccinated by May? <\/strong>The Biden administration announced this week that there would be enough vaccines available for all American adults by the end of May. This announcement marked a significant shift in expectations, and offered more than a glimmer of hope about when the pandemic risk could be stamped out. Part of the accelerated timeline came as the FDA authorized the Johnson &amp; Johnson vaccine for distribution, and as the government brokered a deal between Johnson &amp; Johnson and Merck \u2013 who are otherwise competitors \u2013 to work together on production. Around the same time, Pfizer and Moderna announced they would be increasing production, which also contributed to the May timeframe.<sup>1<\/sup><\/p>\n\n\n\n<p><strong>Are Inflation Worries Overblown? <\/strong>Inflation has been a buzzword in 2021, with many economists and pundits increasingly calling for rising prices in the coming years. With yields on the 10- and 30-year U.S. Treasury bonds on the rise, it seems the market is also starting to price-in higher inflation expectations down the road. While higher inflation in 2021 and beyond is certainly a possibility, it is not a foregone conclusion. Other conditions that tend to spur higher inflation \u2013 such as tight job markets and a lack of spare capacity in the economy \u2013 are currently missing. It is also worth noting that as the chorus for higher inflation grows and more people call for it, there\u2019s a falling likelihood of inflation arriving when everyone expects it to (in our view). As mentioned, inflation could be an issue in 2021 and beyond. But our view is that inflation\u2019s arrival is not likely to be sudden, and it seems very unlikely to happen as most expect. What\u2019s more, the Fed has already made it clear that they would like to see inflation run above the 2% target for some time, drawing a contrast to a decade of low growth and low inflation.<sup>2<\/sup> <\/p>\n\n\n\n<p>______________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2021_03_08&amp;content=retirement_strategy_guide\">Do You Have a Strategy to Protect Your Retirement Assets!<\/a><\/strong><\/p>\n\n\n\n<p>Whether you\u2019re in\nthe beginning of planning your retirement or already on the path to building a\nsuccessful retirement \u2013 it\u2019s important to make sure your investments are\nprotected at all times. Factors, like the vaccine becoming available to more\nAmericans in May and other uncertainties could affect the market. How can investors\nprotect their retirement assets against life\u2019s unknowns?<\/p>\n\n\n\n<p>In times like these,\nit is important to have a strategy in place to account for the market\u2019s ups and\ndowns. Our free guide, <em>How Solid Is Your Retirement Strategy?, can <\/em>help\nyou build a retirement strategy that takes the \u201cwhat ifs\u201d into account.<\/p>\n\n\n\n<p>This guide offers\nour views on some key retirement investment strategies that may help you\npreserve your financial security in retirement, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The\nimportance of flexible portfolio allocation<\/li><li>Why\nkeeping some liquid assets can potentially help you preserve more wealth<\/li><li>Understanding\nyour risk tolerance in case of a market downturn<\/li><li>Plus,\nmore strategies to help you protect your retirement assets <\/li><\/ul>\n\n\n\n<p>If you have $500,000\nor more to invest, get our free guide by clicking on the link below. <\/p>\n\n\n\n<p><strong>Get our FREE guide: <a href=\"https:\/\/go.steadyinvestor.com\/download-retirement-strategy-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_zim_2021_03_08&amp;content=retirement_strategy_guide\">How Solid Is Your Retirement Strategy?<\/a><\/strong><sup>3<\/sup><\/p>\n\n\n\n<p>______________________________________________________________<\/p>\n\n\n\n<p><strong>Nasdaq Flirts with Correction Territory \u2013 <\/strong>Technology stocks in particular have been under pressure recently, as interest rates have been ticking higher. There seems to be a fairly tight correlation happening in the capital markets: as U.S. Treasury bond yields rise, high valuation stocks \u2013 especially those in the tech-heavy Nasdaq \u2013 have come under selling pressure. The reason for this dynamic is that as interest rates rise, stocks are arguably no longer the \u2018only game in town.\u2019 Investors fear that a shrinking risk premium \u2013 which is the difference between the yield on stocks and the risk-free yield on Treasuries \u2013 makes stocks less attractive relative to bonds. It follows that the first dominoes to fall are the priciest stocks, many of which can be found in the Nasdaq.<sup>4<\/sup><\/p>\n\n\n\n<p><strong>Consumers Have Saved Trillions. Are They Poised to Spend It? <\/strong>Fiscal stimulus and direct government payments has not only been a U.S. thing \u2013 developed countries across the world have doled out payments directly to businesses and households. So much so, research estimates $2.9 <em>trillion <\/em>in savings have been accumulated by households since the beginning of the pandemic, $1.5 trillion of which is held here in the United States. The question for the balance of 2021 is: <em>where will this cash go? <\/em>In our view, American households are not likely to sit on this cash indefinitely, and once the economy opens back up, we think the stage is set for a boom in spending. A recent Deutsche Bank study also found that retail investors plan to invest one-third of any future stimulus checks in the market. Which, based on current estimates for the next stimulus, could mean approximately $180 billion of inflows into the equity markets.<sup>5 &nbsp;<\/sup><\/p>\n\n\n\n<p>With so many of these unknowns surrounding the market and\neconomy, there is no way to predict the direction that the market will be headed\nin the future. To help you prepare your retirement for the market\u2019s uncertainties,\nwe recommend finding a retirement strategy that takes these \u201cwhat ifs\u201d into\naccount. Our free guide can help you to prepare for what\u2019s to come as you look to 2021!<\/p>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide, <em>How\nSolid Is Your Retirement Strategy.<sup>6<\/sup><\/em> You\u2019ll get valuable and\npractical ideas to help build a \u201cweatherproof\u201d retirement strategy that can\npotentially protect your retirement nest egg from any storm that could threaten\nyour financial security.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Consumers have trillions to spend, vaccines for all US adults by May, inflation fears may be overblown <\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-9386","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9386"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9386\/revisions"}],"predecessor-version":[{"id":10437,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9386\/revisions\/10437"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}