Trading Trends We Expect in 2021

As 2021 begins there are hopeful signs that the markets will continue to recover this year.  A new US president is promising a return to normalcy and the multi-billion US stimulus package is expected to provide a modest boost to the economy very soon. 

Other market trends are expected to continue well into 2021. Here are a few to look out for.

Biden-positive markets

On January 20, Joseph Robinette Biden Jr. will be sworn in as the 46th president of the United States.

Market analysts are predicting that his administration will bring more certainty and stability to the global economy, and that’s good news for the markets. The outlook is positive and Wall Street is optimistic that the Dow Jones Industrial Average will reach new highs next year.

The expectation is Biden’s presidency will improve trade relations with Europe and possibly China, which will in turn create a better business atmosphere that will reflect positively on the financial markets.

Biden’s policies for managing the health crisis and proposed investments in clean energy could also have significant long-term effects on the markets. 

Analysts remain positive on the ‘green transition’ even as and Gas continue to be necessary as a bridge towards a future with cleaner energy.

Tech stocks slowing

2020 saw unexpectedly strong performances from many tech and cloud-based companies. It marked a year of monumental gains for FAANG stocks (Facebook, Amazon, Apple, Netflix, and Google).

However, 2020’s long bull market is expected to end for tech stocks. Factors that could affect the turn in 2021 include the potential of ’s antitrust litigation against Google and other tech giant firms to continue.

FAANG tech giants represent about 20% of the value of the S&P 500. Therefore any movements in those stocks have large implications. This also then invites the risk that analysts are expecting which is stagnated growth in FAANG potentially dragging down the broader tech market.

Healthcare gains from the vaccine

With the Covid vaccine being rolled out, there are already positive signs for the healthcare industry in general, and pharmaceutical companies in particular.

The obvious early winners are vaccine makers like Pfizer (PFE) or Moderna (MRNA), however, companies working on therapeutic drugs like Regeneron (REGN) will benefit, too.

Other opportunities for investing in healthcare were also prompted by the coronavirus. In recent months, seed investors have backed multimillion- rounds for startups with ‘telehealth offerings’ like postcard urine tests, digital checkups, and pediatricians on demand.

As people avoid in-person doctor visits, these telehealth solutions are offering digitally delivered at-home alternatives.  In fact, recent survey data found that “three-fourths of U.S. millennials would rather search for medical advice and receive treatment online versus seeing a doctor in-person. If those numbers are anything to go by, that opens a massive market for the telehealth industry, with analysts forecasting telehealth revenues to hit $10 billion in 2021.

Oil and Gas looking up

The oil and gas industry took a massive hit in 2020. On April 20th, and for the first time in history oil prices dropped below zero. WTI prices went -$37.63.

However, things are expected to change in the energy sector in 2021. If the vaccine manages to control and lower the spread of the virus, it will lead to eased lockdowns, reopen many countries, and bring many industries such as the tourism and events industries back to life.

All of that spells good news for oil, as demand increases oil prices are expected to rally. There’s a lot to look forward to in 2021. The Covid vaccine, a new US president, the end of negotiations all promising some reprieve from one of the most challenging and uncertain times in recent years. One of the best ways to make sure you’re ready for whatever happens is to watch the markets closely, keep up with sector developments and diversify your portfolio so that you’re positioned for an opportunity no matter how the 2021 markets end up doing.

Provided by Axiory

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