The bulls and the bears are battling it out at critical market levels today as the S&P 500 fights its way towards pre-COVID highs, trading less than a percent below. The Nasdaq 100 has been relentlessly pushing towards continuously new highs despite a growing number of sellers entering the market.

There appears to be a rotation towards cyclical value names that have underperformed the broader market because of their sizable pandemic exposure. Still, tech bulls have remained persistent buying up every dip the bears throw at them.

We are trading up to quite frothy valuations in innovation-driven sectors. The market is pricing in a very optimistic economic recovery, and it feels as if equity prices are hanging by a thread. We will need value sectors like financials, industrials, utilities, and energy to start participating materially if the market rally is to continue.

The economic recovery is happening swifter than analysts anticipated. Weekly unemployment claims fell below 1 million for the first time since the pandemic began last week. But is this unexpectedly rapid recovery already baked into the stock market?

Stocks Discussed

Nasdaq 100 ETF (QQQ Quick QuoteQQQ - Free Report) & Goldman Sachs (GS Quick QuoteGS - Free Report)

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