Wednesday was not a particularly good day for stocks. The Nasdaq slipped by about 1.2%, while the S&P 500 added about seven index points to close essentially flat, and Dow Jones industrial average managed to eke out a gain of nearly 1.3%.
Thursday was shaping up to be much better, with all three major indexes up at least a full percentage point in the afternoon. The day’s best performing sector was technology, up 2.7%, and only financials were trading down for the day.
In a note to investors Thursday, growth investor Louis Navellier commented on the European Central Bank’s decision earlier in the day to boost its bond buyback program. The ECB said it plans to increase buybacks to €1.85 billion over the next three months. Navellier noted: “Even though European bond yields meandered lower this week into even more negative territory, the euro continued to strengthen relative to the U.S. dollar.”
The relatively “sluggish” rollout of COVID-19 vaccinations in some eurozone countries indicates that “Europe is going to be slower to recover … than the U.S. and its 2021 GDP is only forecasted to grow at a 4% annual pace.”
U.S. GDP growth may outpace China’s this year, due in no small part to the $1.9 trillion relief package that Congress passed Wednesday and that the president is expected to sign Friday. The government of China is suggesting that GDP growth this year is targeted at “above 6%,” while at least one estimate of U.S. GDP calls for growth of 6.8%.
Inflation remains under control, with the core consumer price index rising by just 1.3% over the past 12 months and just 0.1% month over month in February.
Navellier closed his Thursday commentary with a reminder that one of the effects of the bubonic plague that hit London in the late 17th century was Sir Isaac Newton’s move to the country where he got bonked on the head while snoozing under an apple tree. Will history repeat itself, asks Navellier:
Will the isolation of many Americans in the past year also unleash a new Age of Enlightenment? The pandemic already has accelerated technological change and worker productivity and I believe more changes are coming to boost productivity, and ultimately, prosperity.