Stock market’s most popular trade faces ‘perfect storm’
Wall Street’s favorite trade of the year is facing a “perfect storm” as the Federal Reserve prepares to exit the emergency measures put in place during the pandemic, according to Bank of America.
The Fed’s decision to end the easy money era of the pandemic sent shockwaves through the market and put the Dow Jones Industrial Average on track for its worst week since January.
Cyclical stocks on Thursday, the day after the announcement, suffered their worst day in over a year when compared to defensive stocks as investors feared the central bank’s tapering could derail the economy. Cyclicals include sectors like industrials, energy and financials, whose performance is tied to the whims of…