View from 5th Avenue

The View at Two – 30th April, 2021

April Showers Bring?… Month-end risk off mentality has introduced some sogginess into the market today, but with stocks arguably in full bloom already near ATHs, it’s hard to say what lies ahead. Yes it’s been a packed earnings / Fed week so there’s a lot to digest, but it feels like all the action has only really served to confirm earlier suspicions and left unanswered the question “what next?” Earnings overall have been pretty good and companies are reflecting optimism about the recovery. Check. Many of those companies are also experiencing input price pressures and supply chain disruption. Check. Big Tech giants are still basically printing money and leaving cons estimate in the dust. Check. And, most important (and predictable), the Fed is sticking to its script on patient policy and transitory inflation. Double check. We’re seeing the market struggle with whether or not “good” corporate updates are “good enough” to extend the already stretched valuations that have been born out of high expectations. The big question mark was and still is the Fed’s stare down with oncoming inflation. Just when they blink is a matter of time given the pace of recovery, but until then stocks may be left struggling for answers…

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