Global stocks rose as investors looked forward to a strong economic recovery from the 2020 downturn. A powerful rotation into cyclical and value-oriented stocks drove markets higher, led by sectors that lagged during the prior year. Conversely, some high-profile technology stocks slipped amid concerns about relatively high valuations and rising interest rates.
Energy and financial stocks posted the largest gains as government stimulus measures and the widespread rollout of COVID-19 vaccinations combined to boost the global economic outlook. Value stocks outpaced growth stocks by a wide margin. Meanwhile, consumer staples, health care and utilities stocks were essentially flat for the quarter.
Bond markets declined amid fears of potentially higher inflation sparked by extraordinary new stimulus measures in the U.S., including a $1.9 trillion COVID relief bill. Bond yields moved sharply higher around the world even as central bankers vowed to keep interest rates low and maintain large-scale bond-buying programs.
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