Weekly Snapshot March 5th, 2021
Market Review: Week Ending 3/5/2021
Returns in the equity markets were mixed this week as the tug-a-war continues between strong growth in a reopening economy clashing with higher interest rates from rising inflation concerns. The Dow Jones Industrial Average (DJIA) led the markets higher, up 1.82% for the week. The S&P500 Index (S&P500) also delivered a positive return of 0.81%. The week’s trailing returns were the Russell 2000 (R2000) down -0.40% and the NASDAQ Composite (NASDAQ) falling the most at -2.06%.1
The pro-cyclical rotation continued with Energy and Industrials extending their rallies. Financials also performed well as the steepening yield curve improves bank profitability. The Consumer Discretionary sector lagged as Amazon, and other past pandemic winners underperformed. For the week, Large-Cap Value was up 2.6% while Large-Cap Growth fell -1.8%.2
February’s employment growth was strong – topping forecasts. U.S. Bureau of Labor Statistics – Nonfarm Payrolls rose by 370,000 compared to the Bloomberg consensus estimate of 200,000. The unemployment improved falling to 6.2%.3 Of note in the report was the significant job gains in the leisure and hospitality areas – a positive sign of reopening. Since the lows in May of 2020 over 12.9 million jobs have been added; however, we are still 9.5 million jobs below the pre-pandemic level.4 Given the Federal Reserve’s dual mandate of price stability and maximum sustainable employment, their accommodative position is a direct result of this employment gap.
News on COVID continues to be positive with the approval of Johnson & Johnson’s single-dose vaccine and President Biden’s announcement that every American adult should have access to vaccines by the end of May – ahead of schedule.
WHAT WE WILL BE WATCHING THIS WEEK
- CPI (consumers price index) – inflation watch
- PPI (producers price index) – inflation watch
- Weekly jobless claims – employment watch
- Michigan Sentiment – economic recovery watch
- Senate passage of COVID stimulus package and its reconciliation with the House version.
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
Sources:
1 FactSet – 3/5/2021
2 John Hancock – 3/5/2021
3 Charles Schwab – 3/5/2021
4 Edward Jones – 3/15/2021
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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.
