Once again I submit for your weekend viewing pleasure this week's segment of the PBS series WealthTrack hosted by Consuelo Mack. We've been observing for a few months now, as optimism concerning recovery just keeps increasing, that investors are engaged in a major historic shift from the high-flying tech stocks that fared so well under the pandemic to the more traditional value stocks expected to do very well in a recovering economy. Market guru Richard Bernstein takes the helm this week in explaining the dynamics behind this shift which covers a vast range from a new party in power to rising Treasury bond yields. Enjoy the program and enjoy the weekend.
3-19-21 MOMENTOUS MARKET SHIFT - A message from Consuelo - March 18, 2021
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March 18, 2021
Dear WEALTHTRACK Subscriber,It doesn’t take a rocket scientist to figure out that 2021 is a year of significant political and macroeconomic change:
- A new party in charge of the executive and legislative branches,
- A new agenda of government activism including record amounts of government spending,
- More regulation,
- The potential for higher taxes for corporations and upper income individuals,
- Plus a continuation of the federal reserve’s record-breaking monetary stimulus.
Meanwhile the rollout of COVID vaccines is starting to unleash a year’s worth of pent up consumer and business demand.
That demand is also putting upward pressure on prices and inflation expectations. Those pressures are showing up in the bond market where yields on long-term bonds, the most sensitive to rising inflation expectations are rising. The price of 30-year Treasurys have fallen 15.6% in just three months.
As columnist James Mackintosh of The Wall Street Journal wrote this week:
“That is the equivalent of almost a decade of the income it offered three months ago, and it is the flip side of the sudden rise in yields. Shorter-maturity Treasurys have fallen less, but even for the 10-year note it will take six years of income to recover the loss of the past three months.”
This is a huge change and could signal the end of the 40-year bull market in bonds that many Wall Street pros have been predicting for years. Perhaps they will now be proven right.
This week’s guest has been telling clients that inflation will probably be higher than many believe, that a significant cyclical recovery is in the works and is bringing with it a major change in market leadership.
He is a noted investment strategist known for his macro analysis and thematic investing. He is Richard Bernstein, Chief Executive and Chief Investment Officer of Richard Bernstein Advisors, which he founded in 2009 and which now oversees or advises over 12 billion dollars in assets, largely in multi-asset allocation strategies for financial advisors using ETFs, and also including two mutual funds under the Eaton Vance name. RBA is ranked one of the ten largest ETF-managed portfolio strategists by Morningstar.
Also in this week’s EXTRA feature, Bernstein reflects on how the COVID experience has changed his professional and personal life.
As always, if you miss the show on public television, you can watch it on our website over the weekend. You can also find the WEALTHTRACK podcast on Stitcher and SoundCloud as well as iTunes and Spotify.
We really appreciate the time you spend with us. Have a lovely weekend and make the week ahead a healthy, profitable and productive one.
Best regards,
Consuelo |
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