Yahoo Finance’s Akiko Fujita and Zack Guzman break down the market action with Vanessa Martinez, The Lerner Group Managing Director.

Video Transcript

AKIKO FUJITA: Welcome to "Yahoo Finance Live." I'm Akiko Fujita along with Zack Guzman. It is risk on in the markets on this Monday, as investors move past inflation fears, at least for now. We are seeing the Dow up more than 650 points right now, the NASDAQ up about 350, and the S&P 500 up 88.

Energy the biggest mover of the day by sector, utilities and financials following closely behind. And we have seen the bond yield softening in this session right now after hitting a one year high last week. Berkshire Hathaway buys back a record amount of company shares as Warren Buffett sees its value dip. We'll break down that move and many more outlined in his annual shareholder letter a little later in the show.

And the momentum building for central banks to issue their own digital currency. We'll discuss what this means for the dollar's dominance in just a few minutes. Let's talk about the market moves first, though, with our first guest for the hour. We've got Vanessa Martinez, Managing Director at the Lerner Group.

And Vanessa, this seems like a real reversal. If you look at the market moves today, given the jitters we saw last week around rising rates, what do you think's driving the gains today?

VANESSA MARTINEZ: I think there's multiple things that are driving it. We've seen J&J come out on Friday saying that they're ready and the immediate response of 4 million doses, as well as 16 million by the end of March. So I feel that positiveness, the decrease in cases. So I feel overall the market feels that positive reaction, as well as on Saturday we had the $1.9 trillion the House passed.

So now I know we go to the Senate. But I think all of this positive energy, and as you mentioned today, the yields, the rates, have gone down from the US Treasury. So I feel those three aspects kind of tied together are what rallying the market now.

ZACK GUZMAN: Yeah, we were talking about inflation fears earlier in the show. And I wonder how much might be changing when we look at some of the incoming data, the data we got this morning in terms of the ISM numbers running the hottest that they've been in three years, and really, factory activity picking up quite a bit.

Talk to me about maybe how strong the data that you're watching is right now and maybe how that could be fueling inflation fears or just maybe fears that the Fed will have to move quicker to maybe tamp-- I know they don't want to tamp the growth down, but maybe make sure things are rising the right way.

VANESSA MARTINEZ: I think sometimes the fear of the tapering of the Fed, as you mentioned, but there's other options. There's the extending of duration. So they could still keep that $120 billion and expand the balance sheet. So that's a positive thing for us, as well as consumer confidence. So if we look at the retail sales numbers that have come out, we've seen that they're at 5.9 if we exclude auto sales.

That's a great number. And we can say it's due to the stimulus of $600 that was given early January. And that seems great. But why is it so much more if we think back towards when the $1,200 check was given in mid-April? It's the consumer confidence. We now see that there's more positive things happening.

Back in 2020, we were in the middle of a pandemic, whereas now, we kind of see the light. I feel that that consumer confidence is what's driving the rallies and what will drive our GDP number up to the expectation of 6% to 6.5%.

AKIKO FUJITA: You mentioned earlier about some of the factors that have all converged over the weekend, the $1.9 trillion stimulus at least passing the House, the Senate still in question, also the J&J vaccine getting the approval.

I mean, expectations seem to be that a lot of this had already been priced in. What does the rally to you suggest how much more runway there is, especially on this expectation that the US could reach some kind of herd immunity by later in the summer or early in the fall?

VANESSA MARTINEZ: That just drives more positive into the market. I know that the stock market is a leading indicator. But I don't feel it's fully priced in. There are some sides of the market that we can see, like big tech, and that's where now it's time for rotation. I definitely believe that investors should look to stay in the market. And it's just about being selective as to what you're choosing to buy.

We hear about value names. We're specifically bullish on financials, as well as the health care sector. There's many health care sectors that right now stocks that are at single digit PEs. Those are the buys right now.

AKIKO FUJITA: Vanessa Martinez, Managing Director at the Lerner Group. Good to talk to you on this Monday.