What are cyclical stocks

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Cyclical Stocks Are Leading the Latest Leg of the Market's Recovery

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The S&P 500 is flirting with record levels, up 4.4% this year, driven largely by outsize gains in mega-cap tech stocks like Amazon.com Inc. and Apple Inc. The shares of both companies have climbed more than 50% in 2020. Recent strides by economically sensitive groups like energy and financial stocks that were battered along with industrial shares during this year's market turmoil are adding to hopes for a continued rally. Their gains are also helping ease worries among some investors who feared a market dominated by a subset of stocks could be vulnerable to sudden reversals.

1. What are "cyclical" stocks? Discuss some examples.

2. Why is broader-based performance in the market considered a sign of market health?

3. What factors are referenced in the article as contributing to the recent rally in cyclical stocks?

4. How have price-to-earnings ratios evolved since August and why (consider both the factors impacting the numerator and denominator)?

Reference no: EM132617926

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