April 1, 2021 Market Updates

• It was a good week for U.S. stock markets, as all of the major U.S. equity indices moved up on the trade-shortened week
• NASDAQ was the clear winner with a gain of 2.6%, but the 1.1% gain for the S&P 500 garnered just as much excitement as it crested the purely psychological 4,000-point barrier for the first time
• The mega-cap DJIA inched up 0.2% and the smaller-cap Russell 2000 rose 1.5%
• The week started with a worrisome tone as it was announced that Archegos Capital Management was defaulting on margin calls and selling more than $20 billion in stock
• But surprisingly, the Archegos issue did not spill over into the markets as much as some anticipated and the markets resumed their march forward as the month- and quarter-end came to a close on Wednesday
• Of the S&P 500 sectors, Communication Services had a big week as it rose 3.4%, while Consumer Discretionary (+2.2%) and Information Technology (+2.1%) also performed well
• Unfortunately, 4 of the 11 sectors ended the week lower, with Energy, Materials, Health Care and Consumer Staples all losing just under 1%
• Much of the news was focused on President Biden’s proposed $2.3 trillion infrastructure plan and news that there would be another stimulus bill proposed soon
• The 10-year Treasury yield was quiet this week as it increased just 2 basis points to 1.68%

The week’s economic data was mostly received positively by Wall Street:

• On Tuesday, the Conference Board announced that its index of consumer confidence recorded its biggest gain in almost 18 years and its gauge of consumer expectations reached its best level since the summer of 2019
• Regional manufacturing indexes surpassed expectations, with the Institute for Supply Management’s gauge of factory activity reaching its highest level since December 1983
• On Thursday, the Labor Department announced that weekly jobless claims moved up to 719,000

On Wednesday, Wall Street closed the books on the month of March and the first quarter of 2021 and many are suggesting that the week’s advancements were the result of profit-taking and rebalancing. Whether or not that’s true is hard to discern, but a quick recap of the monthly performance for March is warranted.

Markets Mostly Up in March

Global equity markets were generally up for the month of March, but like February, it was an uneven ride. For the month of March:

• The DJIA was up 6.6%;
• The S&P 500 was also up 6.6%;
• NASDAQ was up 0.4%; and
• The Russell 2000 was down 2.4%.

Interestingly, the DJIA’s 6+ percentage-point outperformance relative to NASDAQ represented the biggest monthly spread between the two indices since February 2002, according to Dow Jones Market Data. It is especially notable that the DJIA, which has existed for almost 125 years, has outpaced NASDAQ by this much in a month only 19 other times since the NASDAQ index was launched. And that was 1971.

Other categories showed steep declines, including:

While this data was compiled before February’s spike in mortgage rates, it is still the eighth straight monthly gain of 1% or more, which is unprecedented. Further, the year-over-year appreciation of 12% is also a record going back over 30 years.