Taper Time: Bank Of Canada Scales Back Asset-Purchasing Program

Is caution creeping back into equity markets?

Roach ended the segment with a recap of recent equity-market performance, which she noted has been extremely strong during the first several months of 2021. “After some of the major equity benchmarks set all-time highs earlier this month, we saw a bit of a softer performance the week of April 19, with global equities ending the week relatively flat,” she noted.

Peering under the hood further, Roach said that there was weakness in the tech, energy, and consumer discretionary sectors of the market, but that this was mostly offset by stronger performances in defensive sectors, such as healthcare, consumer staples, and utilities.

“This is probably an indication that a little bit of caution has crept into investor sentiment—and some of this is due to recent reports involving the Biden administration’s plan to raise the capital gains tax on Americans making over $1 million a year,” she stated. While the details and timing of this aren’t clear yet, Roach said it’s reasonable to expect an increase in taxes for at least some Americans, given the already announced spending plans of the administration.

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