Viewpoints: IPO update: The SPAC boost

COVID-19 largely wiped out IPOs in the first half of 2020. But IPO activity picked up in the second half of 2020 as well as thus far this year—due in part to the growing prevalence of SPACs.

FIDELITY VIEWPOINTS®

WEEKLY EDITION: March 12, 2021

IPO update: The SPAC boost

COVID-19 largely wiped out IPOs in the first half of 2020. But IPO activity picked up in the second half of 2020 as well as thus far this year—due in part to the growing prevalence of SPACs.

US inflation heats up

Stocks declined after Federal Reserve Chairman Jerome Powell suggested inflation could rise if and when the economy opens up further. Among G7 countries, the US has the highest year-over-year inflation rate.

Keep perspective on bitcoin

It's been called "digital gold," and some think it could act as a store of value and hedge against inflation. But keep perspective: Bitcoin is still a relatively new option for investors with a market value of $1 trillion versus $11 trillion for gold and $160 trillion for stocks and bonds. And investing in cryptocurrency is potentially fraught with risks from regulators, competitors, volatility, and other factors.

Watch home-builder stocks—they could go up

Home prices soared in 2020 as housebound workers looked to trade up for more space. With housing inventory at a low point and the work-from-home trend continuing, it's likely that the home-buying frenzy will continue through 2021. That may be good news for the stocks of home builders and related companies.

Think about inflation protection

The $1.9 trillion stimulus has finally passed—good news for millions of struggling households and businesses. But longer term, exploding federal deficits and Fed stimulus could mean higher inflation and slower growth. For investors, inflation hedges could include Treasury Inflation-Protected Securities, commodities, non-US stock, and low-priced value stocks.

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