Will reopening help the market?

Markets stall near all time highs [Click to view in browser](. Good afternoon, New York decided to hop on the train. Literally. 24-hour subway service returns to the Big Apple on May 17th. Two days later, New York, New Jersey, and Connecticut plan to lift the majority of their Covid restrictions. Yet, markets seem to struggle up here at their all-time highs. [What The Wtf GIF by MOODMAN] What gives? Good news is bad news Let’s start with the premise that most of the rally came from the Fed and their easy money policy. At its core, the goal was to stabilize and improve the economy. Naturally, as the economy improves, their reasons to stick with the policy diminish. Now, up to this point, the Fed offered no indication it plans to raise rates anytime soon. But, the longer the market drags sideways, the closer we get to that point. Several economists theorize that the market could move sideways for the next decade like it did in the 1970s. That’s not to say companies aren’t improving or creating value. But, as we’ve shown before, the valuation of corporate stock sits at exorbitant levels that will take years to work through. Rotation A bigger part of what we’re seeing is a rotation out of technology names and into consumer cyclicals. Commodity names like the XLE energy ETF have risen nearly 10% in the last two weeks. Crude oil’s price per barrel rose over 13% from the March pullback. And as the economy ramps up, supply disruptions portend even higher commodity prices. You need look no further than lumber costs which now add over $30,000 to the construction of a new home! Our hot take In order for the markets to really improve from here, we need to see the global economy reignite. That might not happen for years. During that time, we’ll enter a stock pickers market, where only the best ideas win out. 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