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Weekly Market Insights header image

Weekly Market Insights

The Markets (as of market close April 30, 2021)

Last Monday saw small caps and tech shares drive the Russell 2000 and the Nasdaq higher. Investors may have drawn encouragement from strong, first-quarter corporate earnings reports, solid economic data, and the expectation that the Federal Reserve will maintain its accommodative stance. Following the Russell 2000 (1.2%) and the Nasdaq (0.9%), were the Global Dow (0.6%) and the S&P 500 (0.2%). The Dow dipped 0.2%. The yield on 10-year Treasuries inched up, while the dollar and crude oil prices fell. Energy and consumer discretionary each advanced 0.6% last Monday, while consumer staples fell 1.2%.

Stocks were mixed last Tuesday, with the Dow, Russell 2000, and Global Dow inching up, while the Nasdaq and the S&P 500 declined. Among the sectors, energy advanced 1.3%, while financials and industrials each climbed 0.9%. The remaining major market sectors lost ground with utilities (-0.8%) and health care (-0.5%) falling the furthest. Yields on 10-year Treasuries increased 3.3%, crude oil increased 2.1%, and the dollar inched up 0.1%.

Equities retreated last Wednesday, despite the Federal Reserve indicating that it would continue fiscal stimulus measures in place. Only the small caps of the Russell 2000 and the Global Dow ended the day in the black. The Dow dipped 0.5%, the Nasdaq fell 0.3%, and the S&P 500 dipped 0.1%. Energy advanced 3.4% on word that OPEC+ indicated plans to boost supply, while crude oil prices climbed 1.3%. Communication services gained 1.2%. Information technology fell 1.0%. The dollar and the yield on 10-year Treasuries declined.

Last Thursday, stocks closed higher in what was a volatile session. The large caps of the Dow and the S&P 500 led the way, each climbing 0.7%, followed by the Global Dow (0.4%) and the Nasdaq (0.2%). The small caps of the Russell 2000 ended the session down 0.4%. Treasury yields, the dollar, and crude oil prices all advanced. First-quarter corporate earnings season is in full force, and Thursday's results for some major companies were mostly favorable. Stocks also were buoyed by a strong initial estimate for first-quarter gross domestic product and a notable reduction in new claims for unemployment insurance. Among the market sectors, only health care and information technology failed to gain. Communication services enjoyed a particularly strong day, closing up 2.8%.

Equities retreated last Friday, giving back some of the gains from earlier in the week. The Russell 2000 fell 1.3%, followed by the Global Dow (-0.9%), the Nasdaq (-0.9%), the S&P 500 (-0.7%), and the Dow (-0.5%). The yields on 10-year Treasuries dipped, and crude oil prices lost 2.3%, while the dollar gained 0,7%. Market sectors were mixed last Friday, with energy (-2.7%), information technology (-1.4%), and materials (-1.1%) falling the furthest, while utilities (+0.8%), real estate (+0.6%), and consumer discretionary (+0.3%) advanced.

For the week, stocks couldn't maintain record highs reached earlier, despite strong corporate earnings reports. Only the S&P 500 and the Global Dow were able to end the week in positive territory, while the Dow, the Nasdaq, and the Russell 2000 each fell. Treasury yields, the dollar, and crude oil prices all closed the week up. Market sector performance was mixed, with energy, financials, communication services, real estate, and consumer discretionary ending the week ahead, while health care and information technology declined.

The national average retail price for regular gasoline was $2.872 per gallon on April 26, $0.017 per gallon more than the prior week's price and $1.099 higher than a year ago. U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ended April 23, which was 253,000 barrels per day more than the previous week's average. Refineries operated at 85.4% of their operable capacity last week. Gasoline production increased last week, averaging 9.6 million barrels per day.

Market/Index

2020 Close

Prior Week

As of 4/30

Weekly Change

YTD Change

DJIA

30,606.48

34,043.49  33,874.85 -0.50%  10.68%

Nasdaq

12,888.28

14,016.81 13,962.68 -0.39%

8.34%

S&P 500

3,756.07

4,180.17

4,181.17

0.02%

11.32%

Russell 2000

 1,974.86 2,271.86

2,266.45

-0.24%

14.77%

Global Dow

3,487.52

3,909.72

3,924.14

0.37%

12.52%

Fed. Funds target rate

0.00%-0.25%

0.00%-0.25%

0.00%-0.25%

0 bps

0 bps

10-year Treasuries

0.91%

1.56%

1.63%

7 bps

72 bps

US Dollar-DXY

89.84

90.83

91.26

0.47%

1.58%

Crude Oil-CL=F

$48.52

$62.14

$63.50

2.19% 30.87%

Gold-GC=F

$1,893.10

$1,776.40

$1,768.20

-0.46%

-6.60%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • Following its meeting last week, the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 0.00%-0.25%. The Committee indicated that it expects to maintain this target range until labor market conditions have reached maximum employment and inflation has risen to 2.0% and is on track to moderately exceed 2.0% for some time with the objective that inflation averages 2.0% over time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals. It is worth noting that the Committee would be amenable to adjusting its current monetary stance if risks emerge that could impede the attainment of the Committee's stated goals of maximum employment and inflation averaging at least 2.0% over the longer term.
  • According to the latest report from the Bureau of Economic Analysis, gross domestic product increased 6.4% in the first quarter of 2021. This initial estimate is based on data that is incomplete and likely to be revised in the second and third estimates to follow in May and June. Nevertheless, the estimate of first-quarter economic growth exceeds the fourth quarter 2020 rate of 4.3%. The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses. Compared to the fourth quarter of 2020, the first-quarter GDP saw a 10.7% increase in personal consumption expenditures, a 41.4% jump in nondurable goods, and a 23.6% rise in durable goods.
  • In March, personal income increased 21.1% and disposable personal income rose 23.6% — both figures impacted by increased employment and stimulus payments. Consumer spending, as measured by personal consumption expenditures, advanced 4.2% in March. Consumer prices increased 0.5%. Prices, less energy and food, climbed 0.4%. Over the 12 months ended in March, prices for consumer goods and services have risen 2.3%, personal income has risen 6.1%, disposable personal income has climbed 7.0%, while personal consumption expenditures have fallen 2.7%.
  • According to the latest report from the Census Bureau, new orders for durable goods increased 0.5% in March and are up 10.9% since March 2020. Excluding transportation, new orders rose 1.6%. Excluding defense, new orders advanced 0.5%. In March, shipments of durable goods climbed 2.5%, unfilled orders increased 0.4%, and inventories rose 1.0%. March saw new orders for capital goods drop 3.5%, pulled lower by new orders for nondefense capital goods, which fell 4.7%. New orders for defense capital goods increased 3.8%.
  • The international trade deficit was $90.6 billion in March, up $3.5 billion, or 4.0%, from February. Exports of goods for March were $142.0 billion, $11.4 billion, or 8.7%, more than February exports. Imports of goods for March were $232.6 billion, $14.9 billion, or 6.8%, more than February imports. Over the last 12 months ended in March, exports have increased 11.5%, while imports have advanced 20.6%.
  • Jobless claims continue to ease as the employment sector slowly recovers from the impact of the pandemic. For the week ended April 24, there were 553,000 new claims for unemployment insurance, a decrease of 13,000 from the previous week's level, which was revised up by 19,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims was 2.6% for the week ended April 17, unchanged from the previous week's rate. For comparison, during the same period last year, there were 3,451,000 initial claims for unemployment insurance, and the insured unemployment claims rate rose to 12.1% as the effects of the pandemic continued to impact the labor market. The advance number of those receiving unemployment insurance benefits during the week ended April 17 was 3,660,000, an increase of 9,000 from the prior week's level, which was revised down by 23,000. States and territories with the highest insured unemployment rates in the week ended April 10 were in Nevada (5.9%), Connecticut (5.3%), Alaska (4.9%), New York (4.6%), Illinois (4.3%), Vermont (4.1%), Rhode Island (4.0%), Pennsylvania (3.9%), the District of Columbia (3.7%), and New Mexico (3.7%). The largest increases in initial claims for the week ended April 17 were in Virginia (+8,717), Michigan (+6,300), Indiana (+4,484), Utah (+4,060), and California (+3,417), while the largest decreases were in Texas (-20,036), New York (-16,840), Georgia (-6,001), Florida (-5,564), and Washington (-4,031).

Eye on the Week Ahead

Economic reports out the first week of May focus on manufacturing and employment. The manufacturing sector continued to advance in March and should maintain that trend in April. March saw an impressive 916,000 new jobs added. Some economists are predicting that the new hires in April will exceed 500,000 — a clear sign that businesses are recovering from the effects of the pandemic.

 

The Markets (as of market close April 23, 2021)

Stocks retreated from record highs last Monday. The S&P 500 fell 0.5% — its largest single-day drop in nearly four weeks. Small caps and tech shares dove lower, pulling down the Russell 2000 (-1.4%) and the Nasdaq (-1.0%). The Dow slipped 0.4% and the Global Dow was unchanged. Crude oil prices rose and Treasuries advanced, while the dollar fell. Among the market sectors, only real estate was able to post a modest (0.3%) gain. Consumer discretionary plunged 1.1% and information technology declined 0.9%.

Last Tuesday, stocks fell for the second consecutive day, despite an initial round of solid corporate earnings reports. Investors may be concerned that the growing number of virus cases at home and around the world may stunt economic recovery. The small caps of the Russell 2000 dropped 2.0%, followed by the Global Dow (-1.6%), the Nasdaq (-0.9%), the Dow (-0.8%), and the S&P 500 (-0.7%). Among the market sectors, energy plunged 2.7% as crude oil prices sank. Financials declined 1.8%, consumer discretionary dipped 1.2%, and industrials lost 1.1%. Utilities (1.3%) and real estate (1.1%) advanced. The dollar rose slightly, while the yields on 10-year Treasuries fell 2.4%.

Stocks gained last Wednesday for the first time in three days. More favorable earnings reports may have influenced investors, but the greater likelihood for the stock surge can be traced to dip buyers. In any case, the Russell 2000 led the advance, gaining 2.2%, followed by the Nasdaq, which climbed 1.2%. Both the Dow and the S&P 500 increased 0.9%, while the Global Dow moved up 0.3%. Communication services and utilities were the only market sectors to fall. Materials (1.9%), energy (1.5%), industrials (1.4%), and consumer discretionary (1.3%) advanced. Yields on 10-year Treasuries inched up, while crude oil prices and the dollar fell.

Equities tumbled last Thursday following a report that President Biden may propose a substantial increase in the capital gains tax for the wealthy. Each of the benchmark indexes plunged, with the Dow, the S&P 500, and the Nasdaq each falling 0.9%, followed by the Russell 2000 (-0.3%), and the Global Dow (-0.2%). Each of the market sectors also sank, with materials, energy, information technology, consumer discretionary, and financials each declining more than 1.0%. Treasury yields fell, while the dollar and crude oil prices advanced.

Dip buyers pushed stocks higher last Friday following Thursday's plunge. The Russell 2000 and the Nasdaq climbed the highest, adding 1.8% and 1.4%, respectively. The S&P 500 reached another record high after advancing 1.1%. The Dow climbed 0.7% and the Global Dow gained 0.6%. Treasury yields and crude oil prices rose, while the dollar fell. Nearly all of the market sectors increased, led by financials, materials, information technology, and communication services. Consumer staples and utilities fell.

The possibility of a capital gains tax hike proposed by President Biden sent stocks reeling last week. However, bargain hunters plucked enough low-hanging stocks to push several of the benchmark indexes higher by week's end. The market sectors closed the week mixed, with real estate and health care leading the way. Energy and consumer discretionary each dropped more than 1.0%. The Dow, the S&P 500, and the Russell 2000 eked out gains last week, while the Nasdaq and the Global Dow lost value. The yields on 10-year Treasuries inched higher. Crude oil prices dropped nearly 2.0%, yet remained over $62.00 per barrel. The dollar fell, while gold prices advanced. Year to date, the small caps of the Russell 2000 remain well ahead of last year's pace, with the Dow, the S&P 500, and the Global Dow more than 11.0% over their respective 2020 closing marks. The tech-heavy Nasdaq, which was the highest-gaining index in 2020, trails the other benchmarks this year, but still has added nearly 9.0% to its year-end value.

The national average retail price for regular gasoline was $2.855 per gallon on April 19, $0.006 per gallon more than the prior week's price and $1.043 higher than a year ago. U.S. crude oil refinery inputs averaged 14.8 million barrels per day during the week ended April 16, which was 286,000 barrels per day less than the previous week's average. Refineries operated at 85.0% of their operable capacity last week. Gasoline production decreased last week, averaging 9.4 million barrels per day.

Market/Index

2020 Close

Prior Week

As of 4/23

Weekly Change

YTD Change

DJIA

30,606.48

34,035.99  34,043.49 0.02% 11.23%

Nasdaq

12,888.28

14,052.34 14,016.81 -0.25%

8.76%

S&P 500

3,756.07

4,170.42

4,180.17

0.23%

11.29%

Russell 2000

 1,974.86 2,257.07

2,271.86

0.66%

15.04%

Global Dow

3,487.52

3,943.80

3,909.72

-0.86%

12.11%

Fed. Funds target rate

0.00%-0.25%

0.00%-0.25%

0.00%-0.25%

0 bps

0 bps

10-year Treasuries

0.91%

1.53%

1.56%

3 bps

65 bps

US Dollar-DXY

89.84

91.54

90.83

-0.78%

1.10%

Crude Oil-CL=F

$48.52

$63.37

$62.14

-1.94%

28.07%

Gold-GC=F

$1,893.10

$1,764.90

$1,776.40

0.65%

-6.16%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • Sales of existing homes, which had been one of the few areas of the economy to progress during the pandemic, are now showing definite signs of slowing. According to the National Association of Realtors®, existing-home sales declined in March for the second consecutive month. Total existing-home sales fell 3.7% last month following a 6.6% drop in February. Overall, sales are 12.3% higher than a year ago. Relatively low inventory may be the primary reason for the slippage in sales volume. According to the report, unsold inventory of existing homes sits at a 2.1-month supply at the current sales pace, marginally up from February's 2.0-month supply and down from the 3.3-month supply recorded in March 2020. The median existing-home price in March was $329,100, 5.1% above the February price and up 17.2% from March 2020. Sales of existing single-family homes also fell in March, declining 4.3% from the prior month but up 10.4% from a year ago. The median existing single-family home price was $334,500 in March ($317,100 in February), up 18.4% from March 2020.
  • Unlike existing homes, sales of new, single-family homes continued to surge in March. According to the latest information from the Census Bureau, sales of new single-family homes increased 20.7% over February's total and are 66.8% above the March 2020 estimate. The median sales price of new houses sold in March 2021 was $330,800 ($345,900 in February). The average sales price was $397,800 ($394,300 in February). In March, inventory sat at a supply of 3.6 months at the current sales rate, down from 4.4 months in February.
  • For the week ended April 17, there were 547,000 new claims for unemployment insurance, a decrease of 39,000 from the previous week's level, which was revised up by 10,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims was 2.6% for the week ended April 10, a decrease of 0.1 percentage point from the previous week's rate. For comparison, during the same period last year, there were 4,202,000 initial claims for unemployment insurance, and the insured unemployment claims rate surged to 11.0% as the effects of the pandemic continued to impact the labor market. The advance number of those receiving unemployment insurance benefits during the week ended April 10 was 3,674,000, a decrease of 34,000 from the prior week's level, which was revised down by 23,000. This is the lowest level for insured unemployment since March 21, 2020, when it was 3,094,000. States and territories with the highest insured unemployment rates in the week ended April 3 were in Nevada (5.6%), Connecticut (5.2%), Alaska (5.1%), New York (4.4%), Illinois (4.2%), Pennsylvania (4.2%), the District of Columbia (4.1%), Rhode Island (4.0%), Vermont (4.0%), and California (3.7%). The largest increases in initial claims for the week ended April 10 were in New York (+16,028), Florida (+9,377), Alabama (+5,517), Washington (+5,380), and Georgia (+4,759), while the largest decreases were in California (-76,082), Virginia (-23,492), Ohio (-21,831), Texas (-17,436), and Kentucky (-15,424).

 

Eye on the Week Ahead

Several important economic reports are available this week. The Federal Open Market Committee meets this week. Interest rates are certain to remain at their present range based on statements from Federal Reserve Chair Jerome Powell. The latest information on durable goods orders is out on Monday. New orders for durable goods fell in February, but are expected to reverse course in March. The estimate of the first-quarter gross domestic product is available on Thursday. The 2020 fourth-quarter GDP advanced at an annualized rate of 4.3%. It is expected that growth in the first quarter economic will exceed the prior quarter's figure.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2021.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

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