Weekly Market Snapshot – MARCH 1st, 2021
Created by: Sam Tenney
- As of Friday, February 26th, US lawmakers have taken a “safe harbor” provision out of the transatlantic trade talks bill. This provision would have allowed US based tech giants to voluntarily choose to “opt-in” to any tax deals made in the bill. This was likely removed to signal to European leadership that corporate needs will not surpass government cooperation with the US. ¹
- Value stocks in the S&P 500 have outperformed growth stocks by almost 10% over the past 3 months as many investors position themselves to be long inflation. However, PIMCO bond fund manager Dan Ivascyn believes the markets might be getting ahead of themselves, citing record low money velocity and bad labor markets as reasons why bonds may be priced too low currently. ²
- Regulations around Bank leverage ratios may pose another risk to long term treasury yields. Currently, federal laws prohibiting banks from being outside this leverage ratio are being exempted due to the coronavirus, but if the government fails to extend this exemption banks would be forced to sell long term treasury holdings for cash holdings. ³
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