Even if the real economy is in shambles, that doesn't mean the stock market can't rise. And U.S. equities look primed for a "Superfecta," Jim Paulsen, chief investment strategist at the Leuthold Group, writes in a note to clients.
What it means: Superfecta is a horse racing term in which a bettor correctly picks the first four finishers in exact order.
- "And today, the stock market is enjoying its own Superfecta of positive forces which can win in any order — widespread investor fears, an unprecedented policy push, a significant economic bounce from the ‘lockdown recession’ and an economy with so much room for improvement (starting with a double-digit unemployment rate)," Paulsen says.
Driving the news: The S&P rallied 1.24% on Wednesday, and while U.S. lawmakers remain deadlocked on new relief measures, Wall Street analysts remain confident Congress will produce a new bill.
The big picture: "Although the stock market will certainly experience pullbacks, disappointments and corrections along the way, the horses have just begun this race and investors should be wary of cashing in a winning Superfecta ticket too early," Paulsen notes.