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Market in a Minute March 29 – April 1, 2021

Saturday, April 3, 2021

by Sheila and Rich Jamison

We were surprised! Expected at least a few votes for the old MIAM version, but it didn’t get even one. Guess we’d all like to leave 2020 behind.

Executive Summary

Stocks again traded in record territory. Both the DJIA and S&P 500 hit new highs, the S&P 500 topping 4000 for the first time. The 10-year Treasury yield gained two basis points after flirting with 10 basis points even higher early in the week, a post-pandemic high. The retracement in long-term rates and Q1’s window dressing led to a return of the mega cap, growth stocks. 

WTI crude oil dipped to $60.30 from $61 last Friday. Volatility (VIX) fell to a new 2021 low of 18.2 from 18.8 a week earlier.

Quick Hits

US COVID infections have risen 20% over the past two weeks. However, at our current average of over 2.8 million daily vaccine doses, projections are we will reach herd immunity in another four months.

Improved vaccine availability and relaxed coronavirus restrictions had their effects in several economic reports, primarily benefiting the US. Data (e.g., mobility indices, increasing air travel, Open Table reservations) show US activity inching toward prepandemic levels while continuing flat in Europe. The EU faces limited vaccine availability, and Germany suspended the use of the AstraZeneca vaccine by those under 60 due to blood clot fears.

Manufacturing continues outpacing services. Our March ISM Manufacturing Index jumped to 64.7% from February’s 60.8%, beating estimates handily. The Eurozone’s manufacturing PMI rose to an all-time high of 62.4. The United Kingdom's rose to 58.9, its highest reading in 10 years. Japan's rose to 52.7. In China, the measure rose to 51.9.

The March Conference Board's Consumer Confidence Index jumped to 109.7 from 90.4 in February, beating estimates even more handily. The Eurozone’s Economic Sentiment Index rose less dramatically, to -10.8 from -14.8 amid still widespread restrictions and a start–stop vaccine rollout.

US home prices (Case-Shiller Home Price Index) rose 11.2% year-over-year in January. That's the biggest y-o-y gain since February 2006, when housing was beginning to peak ahead of the global financial crisis.

Friday's federal jobs number for March tallied 916,000 new jobs, blowing past expectations for 675,000. Travel/leisure and construction (up 280,000 and 110,000, respectively) were the leaders. It remains to be seen how this solid jobs number will affect trading as the market was closed Friday.

Earnings season kicks off in about two weeks. FactSet Research projects a 23% S&P 500 earnings rise compared with the first quarter of 2020.

President Biden revealed his $2.3 trillion, eight-year infrastructure-spending plan. It included modernized transportation, improved aging care and more domestic research and development. In addition, it contained climate change mitigation and increased corporate taxes to help finance the spending.

The giant container ship that was wedged in the Suez Canal has been freed and the canal reopened. Hundreds of ships remain at anchor on both ends of the channel as officials prioritize vessels carrying livestock.

 


Sources:
Bloomberg News; Briefing.com; BusinessWeek.com; CNBC’s Power Lunch & Squawk Box; CNN.com; Crain’s New York Business; Dol.gov; Dorsey-Wright Associates; MarketWatch.com; Markit.com; MFS research; Morningstar.com; NASDAQ; NYMEX.com; NYSE; Reuters.com; Standardandpoors.com; Streetinsider.com; The Associated Press; The Financial Times.com; The New York Times; The Wall Street Journal Online; Thomsonreuters.com
 
The data above were taken from sources deemed reliable. However no guarantee can be made as to their completeness and accuracy.
Nothing in the above is meant to be, nor should it be construed as, investment advice or recommendations to buy or sell any security. Individual securities, whenever mentioned, are for illustrative purposes only and may not be relied upon as investment advice.
All indices are unmanaged and are not illustrative of any particular investment. A direct investment cannot be made in any index.
Tax and/or legal information contained herein is general in nature and for informational purposes only. It should not be relied upon as advice. Consult your tax professional or attorney regarding your unique situation.
Past performance is no guarantee of future results.

 

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