Stocks Had a Fantastic First Half of the Year. What Happens Next? – Barron’s

The first half of 2021 is winding down—and what a half it’s been for investors.

The S&P 500 has gained more than 14% this year, far better than the 4% loss in the index at this point in 2020.

Last year, of course, was all about Covid-19 lockdowns, which cratered the U.S. economy. There were big winners, though, as investors piled into stay-at-home stocks. added 49%. Netflix and Microsoft shares rose 41% and 30%, respectively.

Newsletter Sign-up

The Barron’s Daily

A morning briefing on what you need to know in the day ahead, including exclusive commentary from Barron’s and MarketWatch writers.

What a difference a year makes. The list of 2021 winners is dominated by commodity and industrial businesses. Marathon Oil, up 101%, is the top-performing stock in the S&P, boosted by oil prices that have risen 50%. Nucor has gained 80%, propelled by an equal rise in steel prices. Ford Motor has climbed 71%. Some of 2020’s winners, meanwhile, aren’t doing much, with Amazon stock is up just 6%, while Netflix has fallen.

Looking ahead, investors will have to be a little pickier about which old-economy stocks to hold. Oil prices probably aren’t going to go up another 50% from here. But industrial and bank stocks can keep working as the economy continues to grow. Old winners, like Amazon, could gain momentum if they believe business fundamentals have caught up to the stock price.

Whatever happens, just don’t expect the second half of the year to look like the first. The market will have surprises in the second half of 2021.

Investors hope they are the positive kind.

Al Root

*** Join Barron’s senior managing editor Lauren R. Rublin and deputy editor Alex Eule Thursday at noon to discuss the outlook for tech companies and individual stocks. Sign up here.


Didi, One of the Biggest IPOs of the Year, Begins Trading Today

Didi Global, China’s ride-hailing answer to Uber, raised $4 billion, in an upsized deal ahead of its debut trading on the New York Stock Exchange today.

  • Didi sold 316.8 million American depositary shares at $14 each, the top of its indicated range. Four such shares represent one class A ordinary share. The company had planned on offering 288 million shares. The deal implies a $73 billion market capitalization for the company on a fully diluted basis.
  • SentinelOne, a Daniel Loeb-backed cybersecurity firm, also priced an IPO Tuesday evening at $35, to raise more than $1 billion. Coupang, a Korean e-commerce firm, raised $4.6 billion in March as the biggest IPO this year.
  • Didi pushed Uber out of China in 2016 after a crushing price war, but Uber retained a stake after selling Didi its operations there. After the IPO, Uber’s percentage of voting power will drop to 6.4% from 12.8%.
  • Other big shareholders include Japan’s SoftBank and China’s Tencent Holdings. Morgan Stanley, one of the underwriters, is buying $750 million of shares and Singapore’s state-owned investment firm Tamasek is buying $300 million.

What’s Next: It’s a busy week for initial public offerings, with at least 16 companies lined up to price their shares this week including doughnut chain Krispy Kreme, which is on deck to begin trading using the ticker DNUT on Thursday.

Luisa Beltran and Liz Moyer


Biden Touts Improvements in Bipartisan Infrastructure Plan

President Joe Biden promoted the roughly $1 trillion infrastructure deal from a transit center in La Crosse, Wis., on Tuesday, saying it will strengthen the economy, create millions of blue-collar jobs, and modernize roads, bridges, railways, airports, high-speed internet access, and drinking water systems.

  • The largest-ever investment in public transit and passenger rail upgrades since Amtrak began in 1971 would also build a more resilient power grid and install electric vehicle charging stations, according to the White House. Biden compared it to the national rollout of electricity and the federal interstate highway system.
  • Biden said the U.S. is competing with China and other countries to build the strongest economy in the 21st century, and that “China is going full-bore” on its infrastructure investments.
  • Democrats hope to pass the infrastructure bill with enough Republican votes to reach the 60-vote threshold required for most legislation, and a separate, bigger antipoverty bill by a simple majority using budget reconciliation.
  • Separately, The Wall Street Journal reported Biden is considering an executive order directing agencies to strengthen oversight of industries dominated by a small number of companies.

What’s Next: Senate Majority Leader Chuck Schumer (D., N.Y.) has said he wants both the infrastructure and the antipoverty packages on the floor for debate in July, but neither piece of legislation is expected to make it to the president’s desk for weeks or months.

Janet H. Cho


Vaccine Studies Show Some Promise Against Variants

Moderna said its Covid-19 vaccine shows promise against several coronavirus variants, including the Delta strain first identified in India. A lab study of eight people a week after their second vaccine dose found that they had produced antibodies against the variants.

  • The degree of protection wasn’t immediately clear, but Moderna CEO Stéphane Bancel said “these new data are encouraging and reinforce our belief” in its vaccine’s effectiveness against new variants. Moderna is also testing several dosages of its original formula combined with another vaccine.
  • Moderna also announced on Tuesday that its mRNA vaccine had been approved for import and for emergency use in people 18 and older in India. Moderna’s Covid-19 vaccine has been authorized for emergency use by the World Health Organization and in more than 50 countries.
  • Altimmune, a clinical-stage biopharmaceutical company, said it will stop working on its nasal spray to prevent Covid-19 after disappointing trial results. It will instead focus on developing its therapeutics for obesity and liver diseases. Its shares plunged in response to the news.
  • Acting on a key consumer protection tied to the Covid crisis, the Supreme Court declined to lift a moratorium on the eviction of tenants who have fallen behind on rent payments.

What’s Next: A study released Tuesday said the one-shot Johnson & Johnson vaccine produced neutralizing antibodies against the original coronavirus as well as some variants. Researchers said further study is needed to know how it would perform against Delta and other newer variants.

Janet H. Cho


Google Agrees to Curb Financial Scams in the U.K.

Google bowed to pressure from British police and regulators and said that all financial services advertising on the platform would have to register with the Financial Conduct Authority.

  • The new requirements will take effect on Sept. 6, the company said.
  • Google said that ads for debt services, gambling, crypto-assets or credit repair would not be considered financial services under the new policy.
  • FCA Chairman Charles Randell said last year that it was absurd for the watchdog to pay Google for ads warning consumers about certain investments while the company was earning “millions” from inappropriate promotions.
  • The watchdog issued 1,500 warnings last year about fraudulent financial ads on Google and other platforms, twice more than in 2019.

What’s Next: The FCA welcomed Google’s decision as a “positive move” but is calling for “a permanent and consistent solution” in the form of legislation, and asks that the fight against financial scams be included in the U.K.’s Online Safety Bill currently under discussion.

Pierre Briançon


Buffett, Munger Talk Lessons From the Pandemic and Robinhood

In a prerecorded interview with CNBC that aired Tuesday, Berkshire Hathaway CEO Warren Buffett, 90, and his longtime business partner Charlie Munger, 97, discussed the uneven impact of the pandemic on small businesses, their negative views of Robinhood, and the dangers of excessive margin.

  • “I don’t know how many but many hundreds of thousands or millions of small businesses have been hurt in a terrible way. But most of the big, big companies have overwhelmingly done fine unless they happen to be in cruise lines or hotels or something,” Buffett said on the impact of the pandemic.
  • Munger said he believes a lot of business travel, among other things, won’t come back following the pandemic. “A lot of people have found they don’t need to be [in an office]. I think all kinds of things are going to happen that we don’t go back to what we did before.”
  • Both Buffett and Munger were highly critical of Robinhood. Munger called the stock trading app “a gambling parlor masquerading as a respectable business.” Buffett said: “[Robinhood] is not encouraging people to buy a very, very, very low-cost index fund and hold it for 50 years.”
  • Reached for comment, a Robinhood spokesperson referred Barron’s to a statement from May. “Robinhood has made investing simpler and more accessible to more people—and the public has responded. We are proud of that fact,” Robinhood’s head of public policy communications wrote at the time.

What’s Next: Asked about the blowup of hedge fund Archegos Capital, Munger called for more strict margin requirements. “Last time around, we got the correct regulation that came and stayed for a long time on margin debt only because we had the worst depression in the history of the English-speaking world.”

Connor Smith



Dear Quentin,

I am the youngest of three siblings, and I am the only son, the oldest being a half-sister from my mother and her ex-husband. My two older sisters live in our hometown near my parents. I live far away in another state.

My middle sister has not been as successful as my oldest sister or I, and lives paycheck to paycheck with help from my parents.

My parents have a multi-house lakefront property my parents live on that has been in my mother’s family for nearly 100 years. While my parents aren’t anywhere near their end, the discussion has already come up of what may happen to the house and property.

My middle sister said our mother told her that she is getting the house unless I move home because I am financially independent. My mother denies she told my sister that, but I believe my sister. I’ll absolutely respect the wishes of my parents, but I worry that the fairest approach will inevitably favor my middle sister.

I suppose I am somewhat jaded from the difference in treatment between my siblings and how my middle sister continues to fail upwards. I foresee them leaving the house to my middle sister, as she has proven she can’t handle cash or inherited accounts. She will probably move in there after she sells the house my parents bought her, and I will have to watch the property deteriorate.

With my middle sister being unwed and having no children, I worry what will happen to it after she passes. Of course, my parents won’t discuss this matter, and it is rude of me to even ask at this point.

My biggest concern is the condition of the home and keeping it in the family as I have no plans to raise a family there.

My oldest sister and I are on the same page and feel that it should be a summer home for the family, and a home for someone if they need it, but not a permanent residence. I’ll be able to come to an agreement in a difficult situation with my oldest sister—the middle sister not so much.

Could you lay out what options my parents may have knowing they have already put their assets in a family trust and how it might shake out for me and my sisters?


—Looking for Equitable Solutions

Read The Moneyist’s response here.

Quentin Fottrell


—Newsletter edited by Liz Moyer, Stacy Ozol, Mary Romano, Matt Bemer, Ben Levisohn