The Bottom Line
● The S&P 500 closed the week at a new all‐time high after a shaky start to the week. Like last week though, technology and small cap stocks fell, with the Nasdaq Composite down ‐0.6% and the Russell 2000 down ‐2.9%.
● February economic data continued to show the negative impact from severe winter weather across much of the U.S. as existing home sales, new home sales, Chicago Fed National Activity Index, durable goods orders, personal income, and personal spending were all disappointing.
● March Richmond Fed manufacturing data and March consumer sentiment beat expectations with strong results signaling the soft February data was temporary.
S&P shrugs off ship load of problems
For the S&P 500, the week marked the one year anniversary from the pandemic bear market low last March, and it posted its best weekly gain in three weeks, up +1.6%, closing at a new all‐time high. More broadly, stocks were mixed while bonds rebounded. The Dow Industrials gained +1.4%, but the Nasdaq Composite and Russell 2000 fell ‐0.6% and ‐2.9%, respectively. Developed market international and emerging markets stocks fell. Inflation fears eased some with Personal Consumption Expenditures (PCE), the Fed’s key gauge of inflation, up just +1.4%. The 10‐year US Treasury yield fell 4 basis points to 1.68%, the first down week since the end of January. That helped the Bloomberg US Aggregate Bond Index gain +0.5%, its first positive week in the last eight. The big story of the week was the disruption to global supply chains after a massive container ship became lodged in the Suez Canal. Supply chains have been under strain for the past year due to COVID‐19 and blocking a major world trade route just intensified the problem. An estimated 12%of global sea trade has been impacted by the blockage, as some 300 ships and billions of dollars of goods now wait to cross the canal. It may be Wednesday before it is cleared.
Digits & Did You Knows
YOU’RE GROUNDED — The Ever Given, one of the largest container ships in the world, has been wedged in the Suez Canal since it ran aground on March 25th. The ship stretches more than 1,300 feet, which is almost as long as the Empire State Building is tall. The Suez Canal handles around 12% of global trade. Each day of blockage disrupts more than $9 billion worth of goods, which translates to about $400 million per hour (source: Lloyd’s List, CNBC).
BIG DOLLAR DETOUR — The additional cost per voyage to cargo owners and shipping operators to divert ships around the southern tip of Africa instead of through the Suez Canal runs about $450,000 (source: The Wall Street Journal).
Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.
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