Wall Street analysts said investors should expect more volatility because the economic recovery is most likely to be 'uneven' and shaped like 'rolling Ws.'
. Those stocks were once the high-beta leaders of the market comeback as investors bet that a successful reopening would take hold.
"Although the stock market was suggesting a V-shaped recovery, the more likely scenario is rolling Ws," Liz Ann Sonders, chief investment strategist at Charles Schwab, said in a note.Co-founder of DataTrek Research.
"Whichever way it breaks...should be an very important development in trying to determine how this critical juncture in the stock market will be resolved," Maley said in a note.While the flattening virus curve played a big role in the market rebound, it's no denying that the Federal Reserve's unprecedented stimulus has been a key driver in lifting stocks from the coronavirus slump.
"The Fed can't prevent the volatility we're seeing in stocks," Lindsey Bell, chief investment strategist at Ally Invest, said in a note. "It will likely take years for the economy to fully recover and there remain other uncertainties on the path ahead. As such, investors may continue to struggle with this mismatch between markets and the economy before seeing the case for new highs.
Fed Chairman Jerome Powell reminded investors again this week at his semiannual testimony before Congress that "Many on Wall Street have also warned that extended policy measures including injection of trillions of cheap money would lead to problems down the road such as hyperinflation.Tuesday10:00 a.m.
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