Weekly Snapshot March 12th, 2021
Market Review: Week Ending 3/12/2021
U.S. equity markets were solidly in the green this week with the Dow Jones Industrial Average (DJIA), S&P500 Index (S&P500), and Russell 2000 Index (R2000) all making new closing highs. The NASDAQ Composite (NASDAQ) also gained breaking three straight weeks of declines. The R2000 led the markets higher, up 7.32% for the week. The DJIA jumped 4.07%, S&P500 gained 2.64%, and NASDAQ rallied 3.09%.1 Year-to-date, the DJIA has returned 7.1%, S&P500 5.0%, and NASDAQ 3.4% and R2000 19.0%.2
Given fiscal stimulus, central bank support, positive COVID data, recovering corporate earnings, and consumer savings levels – strong economic growth continues to be the catalyst pushing the equity markets higher. With the economy improving and the 10-Year U.S Treasury yield above 1.60%, the rotation trade into value and cyclical stocks continued. Over the last four weeks, the value index rose 5.9% while its growth counterpart fell 5.5%.3 The trend toward equities and away from bonds can also be seen in this weeks’ Bank of America’s Flow Show report. The report showed $41.5 Billion inflows into equities while $15.4 Billion left bonds.4
President Biden signed into law the $1.9 Trillion American Rescue Plan Act with the hopes a follow-on infrastructure-focused $2-4 Trillion “Build Back Better” program. Although a short-term economic boost, large and open-ended fiscal stimulus could potentially develop into longer-term investment risks: an overheating economy (inflation), rising government debt (deficits), and higher expectations (entitlement).5
On the economic front, the University of Michigan Consumer Sentiment Index rose to 83.0. Beating consensus and its highest level since March 2020.6
WHAT WE WILL BE WATCHING THIS WEEK
- Federal Reserve Board meeting – setting expectations on the economy, interest rates, and inflation.
- Retail Sales – consumer spending direction.
- Housing Starts and Building Permits – rising interest rate impact.
- Weekly unemployment claims – employment watch.
- Conference Board’s Leading Economic Index – forward looking economic bellwether.
As always, we appreciate your confidence in our team.
Fundamentum Investment Committee
John Nichol, CFA® – Chief Investment Officer
Trevor Forbes – Investment Committee
Robert Armagno – Investment Committee
Matt Dunn, CFA® – Chief Compliance Officer
1 FactSet – 3/12/2021
2 T.Rowe Price – 3/12/2021
3 John Hancock – 3/12/2021
4 FactSet – 3/12/2021
5 Edward Jones – 3/12/2021
6 Charles Schwab – 3/12/2021
CMAX Tracking #5122011
Investment advice offered through Fundamentum LLC a registered investment advisor. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no assurance that the investment objective of any investment strategy will be attained. Investing involves risk including loss of principal. Past performance is no guarantee of future performance. All indices are unmanaged and may not be invested into directly.