Investors reach for riskier assets as fear seeps out of markets
Published: 05:05 PM,May 16,2024 | EDITED : 09:05 PM,May 16,2024
Traders work on the floor at the New York Stock Exchange in New York City, US. — Reuters
NEW YORK: US stocks are at fresh records, bitcoin is soaring and investors are spurning insurance against portfolio declines as evidence that the economy is headed for a so-called soft landing whets market participants’ appetite for risk.
Call it the Goldilocks trade - a bet that the Federal Reserve will be able to tame inflation while keeping growth from declining too rapidly.
While that outcome was in doubt as recently as last month, investors have been reassured by a more recent spate of economic data - including Wednesday’s report showing US consumer prices slowed more than expected in April.
Investors’ newfound renewed penchant for risk-taking can be seen across asset classes.
The S&P 500 hit a new record high on Wednesday and is up 11% year-to-date as it rebounds from last month’s decline. The Nasdaq Composite Index and Dow Jones Industrial Average scaled fresh heights as well.
Assets such as bitcoin and meme stocks, which are often seen as barometers of risk appetite though their ties to economic fundamentals are often questioned, have also soared. — Reuters
Call it the Goldilocks trade - a bet that the Federal Reserve will be able to tame inflation while keeping growth from declining too rapidly.
While that outcome was in doubt as recently as last month, investors have been reassured by a more recent spate of economic data - including Wednesday’s report showing US consumer prices slowed more than expected in April.
Investors’ newfound renewed penchant for risk-taking can be seen across asset classes.
The S&P 500 hit a new record high on Wednesday and is up 11% year-to-date as it rebounds from last month’s decline. The Nasdaq Composite Index and Dow Jones Industrial Average scaled fresh heights as well.
Assets such as bitcoin and meme stocks, which are often seen as barometers of risk appetite though their ties to economic fundamentals are often questioned, have also soared. — Reuters