By April Joyner and Kate Duguid
NEW YORK (Reuters) – Risk assets such as stocks and high-yield corporate bonds have climbed over the past two-and-a-half months despite a dire global economic outlook in the wake of the novel coronavirus pandemic.
The rally has left some market observers scratching their heads but has also given rise to a bundle of jargon – some old, some new – attempting to explain recent trends. Here’s a guide to what’s driving financial markets now, in Wall Street’s own words.
DON’T FIGHT THE FED
One key factor in Wall Street’s climb, strategists say, is the unprecedented monetary support from the Federal Reserve, including purchases of corporate bonds and exchange-traded funds. The Fed’s balance sheet has expanded by some $3 trillion since March. Those actions have revived the slogan “Don’t fight the Fed,” as the liquidity supplied by the U.S. central bank has fueled an upward