In a week that saw a plunge in stock volatility, investors scooped up companies mostly tied to an economic recovery. On the other side of the spectrum, bond traders sent Treasuries slumping.
It may be too early to say that the reflation trade has come back in full force, but at least the anxiety regarding the Federal Reserve’s hawkish tilt has eased. At least for now, there’s a perception that officials won’t rush to boost interest rates despite mounting inflation pressures. The S&P 500 had its best week since February, with financial and retail shares beating the tech giants that powered the stay-at-home strategy. The Cboe Volatility Index, or the VIX, tumbled to pre-pandemic levels.
