Weekly Snapshot March 29, 2021
Market Review: Week Ending 3/26/2021
This week marked the one-year anniversary of the COVID market bottom with the S&P500 Index (S&P%500) falling approximately 34%. With substantial monetary-policy stimulus, significant government fiscal aid, and rapid vaccine development and distribution, the markets responded rising over 75% for the S&P500.1
For the week, equity markets were mixed with the Dow Jones Industrial Average (DJIA) up 1.39% and the S&P500 rising 1.57%. On the downside, the NASDAQ Composite (NASDAQ) fell 0.58% and the Russell 2000 Index (R2000) falling the most at 2.89%.2 Large capitalization value stocks continued to outperform growth stocks for the seventh week in a row. Over these seven weeks, the value benchmark has returned around 7% while the growth benchmark dropped about 4%.3 S&P 500 sector outperformers for the week were REITs +4.27%, Consumer Staples +3.90%, and Energy +2.99% while sector underperformers were Communication Services -1.88%, Consumer Discretionary -0.21%, and Financials +0.96%.4
Unemployment benefits fell sharply in the latest week to 684,000 – the lowest number since the pandemic sent unemployment levels soaring.5 As a result of stimulus checks, the University of Michigan consumer sentiment index for March improved over its preliminary reading. The strongest figure since March 2020.6 With respect to interest rates, the speed of the move in interest rates has been a bigger concern than the overall level. This week, yields stabilized, with the 10-year Treasury yield pulling back to 1.65%.
Two days of congressional testimony by Treasury Secretary Yellen and Federal Reserve Chairman Powell yielded no change in policy and expectations – higher bond yields are a result of a stronger economy and inflation is transitory. The Federal Reserve did announce it would lift capital return restriction (share buybacks and dividend increases) for most banks after June 30th.
WHAT WE WILL BE WATCHING THIS WEEK
Various economic reports on the health and direction of the economy:
- The Conference Board, Consumer Confidence Index – general economic mood of the country?
- Institute for Supply Management’s manufacturing index – economic rebound continuing?
- U.S. Bureau of Labor Statistics Jobs and Unemployment – employment recovery continuing?
- Grounding of the containership “Ever Given” in the Suez Canal – blocking 12% of global trade?
- The forced liquidation of Archegos Capital Management – collateral damage to the equity markets?
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
Christopher A. Silipigno, ChFC® – Investment Committee
Christopher G. King – Investment Committee
Timothy J. Shumsky – Investment Committee
1 John Hancock – 3/26/2021
2 FactSet – 3/26/2021
3 John Hancock – 3/26/2021
4 FactSet – 3/26/2021
5 John Hancock – 3/26/2021
6 FactSet – 3/26/2021
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