After a long period of pretty consistent gains, the decline in the market on Thursday feels extra painful. Leading up to Thursday we saw stagnant growth in the markets led partly by a strong increase in bond yields. In fact, the 10-year treasury had its largest advance in a day since November.
The growing bond yields also are also reducing sentiment for some of the strongest players in our market. Since the start of the year, we’ve seen investors selling off and straying away from companies like Apple and Tesla, which has had a negative effect on their share prices.
On Thursday all of the major indexes were down, with the NASDAQ leading the retreat, dropping by 3.5%. That’s the biggest loss it’s seen in a day since October.
Even with this disheartening news, many people involved in the markets believe 2021 will be a year full of growth. Bank of America surveyed fund managers and found that over 90% believe the economy will grow this year. That is the most positive outlook BoA has ever recorded since the 90’s when they started the survey.
Even with rising bond yields, many are under the assumption that increased vaccinations and stimulus will help profits throughout all the sectors as the year progresses. In addition, decreasing unemployment numbers should help the market out as well.
