The Recovery Just Started. Yet, Markets Have No Clear Direction

The first half of the year closed with double-digit percentage gains powered by an economic recovery that many investors believe is still picking up pace. The Dow Jones Industrial Average is 13% higher this year and closed June at a record high while the S&P 500 has climbed 14% this year. This quarter marks the fifth consecutive quarter of gains for both indexes, their longest such streak since a nine-quarter stretch that occurred in 2017.

The mood should be energetic. Data on hiring, consumer spending and small business owners' confidence have bounced back and stayed above their pandemic lows.

Yet for many money managers the last few months have felt like anything but a straightforward win. After a 12 month period in which it seemed stocks could do nothing but go up, many say the outlook is becoming increasingly opaque.

“These days, nothing really gets killed, but nothing really does that great, […] There is no definable trend, and there is little agreement on the market.” Andrew Slimmon, managing director at Morgan Stanley Investment Management


  • Technology and cyclical stocks have both had their moment in the sun following the pandemic
  • This rally appears to cool down as investors are looking for a direction
  • The market might just return to its “normal behaviour” of rewarding patient investors who manage to find strong companies with growing sales or profits
  • As it has always been the case, the market will sometimes overheat or reward momentum/meme-stocks in an irrational way
  • We therefore stay on the lookout and have assembled a portfolio with over 40 stocks that are reasonably priced for now yet offer strong growth prospects


Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.


Photo by Ishant Mishra on Unsplash.