Wall St Week Ahead Last year’s laggards lead U.S. stocks’ 2023 rebound, for now
U.S. stocks that took a beating last year are surging in the early weeks of 2023, leading markets higher. Some investors believe that trend is unlikely to last.
Stunning gains in shares of companies such as Nvidia (NVDA.O), Netflix (NFLX.O) and Meta Platforms (META.O) are lifting sectors that struggled in last year’s selloff, including technology (.SPLRCT), and communication services (.SPLRCL).
Smaller stocks that tumbled in 2022 have also burst out of the gate: a Goldman Sachs basket of unprofitable tech stocks that tumbled over 60% in 2022 has rebounded 21% in 2023, dwarfing the S&P 500’s 6.5% gain.
A range of factors are driving the moves, including the attractiveness of beaten-up shares, a tailwind from falling bond yields and market participants unwinding bearish bets against stocks.
Some investors, however, are skeptical that the gains will last, especially if markets continue recalibrating expectations for how high the Federal Reserve will need to raise rates this year to keep cooling off inflation.
This report’s information was first seen on REUTERS; to read more, click this link.