The Bottom Line
● The S&P 500 continued to set new record highs, this time above the 4,000 level for the first time to start the second quarter. Technology stocks sustained their renewed strength and led the Nasdaq and growth indices to the top of the charts over the holiday‐shortened week.
● Although it was as high as 1.75% on Wednesday, the yield on the 10‐year U.S. Treasury bond fell to 1.67% to end the week, its first weekly decline in the last eight weeks.
● As expected, the weak February economic data, which was negatively impacted from severe winter weather in much of the U.S., was temporary. March data has been strong and ahead of economist expectations.
S&P hits new high and crosses 4,000
The big story from last week faded after the Suez Canal reopened once the Ever Given — the massive container ship which blocked it — was freed. Markets didn’t wait for global supply chains to recover as global stocks posted solid gains for the holiday‐shortened week. It was another record close for the S&P 500 and its first time above the 4,000. A continuing rebound in technology stocks led the rally, and helped power the Nasdaq Composite to a +2.6% weekly gain. Rising bond yields have been a headwind for technology stocks for weeks, but despite climbing as high as 1.75% on Wednesday, the yield on the 10‐year U.S. Treasury notes fell to 1.67% on Thursday, its largest one‐day decline since November. With the Suez Canal open and bond yields no longer rising, at least for now, investors showed optimism for continued economic growth as vaccinations become more widespread and new stimulus programs were proposed – the latest on Wednesday as President Biden unveiled a $2.3 trillion, eight year plan for infrastructure and other projects. Meanwhile economic data for March has been strong, with solid manufacturing and consumer confidence, as well as a stellar jobs report on Friday when markets were closed.
Digits & Did You Knows
CUT YOUR LOSSES — $8 billion is the amount of money lost by former hedge‐fund manager Bill Hwang’s family office, Archegos Capital Management, over 10 days, marking it the biggest single‐firm meltdown since the financial crisis. Hwang had placed large bets through “total‐return swaps” that had obscured his heavy exposure to a handful of companies.(source: The Wall Street Journal).
SUMMER VACATION — American Airlines plans to increase seats available for flights to St. Thomas in the U.S. Virgin Islands this summer by 150%. As more Americans get vaccinated, airlines are scrambling to add new flights to meet expected demand (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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