He said: “It looks like everything is marked with an asterisk. You can’t look at economic data without wondering how the stimulus checks and employment benefits affected it. When looking at the rise in the prices of goods and raw materials, the idea that it is “transient” always seems to be mentioned as a reason to ignore it. Everyone is looking for pure data that just doesn’t exist.
The Fed has now started talking about phasing out and looking at the world beyond government and central bank stimulus efforts is now the main task for the second half of the year. With many programs slated to be phased out after Labor Day, third-quarter earnings comparisons more difficult for companies to make, and the market set for perfection, Taylor thinks this could make the investment environment more attractive. hard.
He said: “Gone are the days when only large-cap tech stocks dominated and everything else was sidelined. The reopening of trade led to a rapid rise in bond yields and allowed long forgotten sectors, such as energy, to take the lead. Cyclicals, including banks, are back in favor, allowing the S&P and TSX to outperform the US S&P 500 for the first time in many years.
“In a more demanding environment. are these trends reversing? Is the new defensive tech sector taking back the lead? These questions will all need to be addressed.
He added that recent trends could lead to a return to active management. For most of the past decade, investors have been content to buy the benchmark and go about their business, but as the world grapples with a return to normal, more shocks are expected. .