As we have discussed previously, last year parts of the economy rebounded as businesses that were able worked remotely and people stayed at home and shopped online.
However, as you can see in this chart produced by First Trust, the businesses that struggled last year are starting to rebound. Unemployment is dropping and the travel and entertainment industry is growing again as people, tired of being homebound, are starting to travel as the vaccination rate increases.
This pent up demand is likely to continue to accelerate growth in these type of businesses over the course of this year pushing up overall economic growth. The stock market, already overvalued, could continue to grow at a quick pace, grow slower and become more fairly valued, or experience a market correction and then continue to grow. Only time will tell. But either way, with the rest of the economy growing the prognosis is likely to be positive over time in the stock market.