After the year we had in 2020, we can confidently say that 2021 is both the continuation of the old market and the beginning of the new market. Entering the post-pandemic era, the market will usher in changes including the global roll out of coronavirus vaccination programmes,  and the resumption of most activities. It can be said that volatility will not change and is inevitable, but this will create more trading opportunities. Here’s a look at the top ten trading themes of 2021. Let’s look at the US equity markets. 

 

U.S. stocks continue to hit new highs

 

The US equity markets are set to benefit from the ongoing economic recovery in the country  fueled by the low interest rate environment. The three major U.S. indexes are set to hit historical highs, and small cap stocks will also benefit from the expected economic recovery. Major changes are expected in global politics, as Biden’s administration is expected to champion a return to the global multilateral framework, creating favourable conditions for U.S. stocks to rise. Therefore, the overall momentum in US stocks will show a sharp upward trend.

 

Ultimately, the biggest driving force behind the rally in US stocks will be the US economy. If Biden launches a large-scale economic stimulus plan as scheduled, but it fails to provide the massive momentum that the markets need, then US stocks that have risen ahead of time will prove to be overvalued, and no matter how strong the "bull trend" is, it may be cut off. Furthermore, it is worth noting that technology stocks that led the market higher last year are expected to post lower percentage gains this year. It remains to be seen whether they can replicate last year’s performance. After all, 2021 may see tech stock face  more stringent regulatory policies under the Biden administration.

 

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