Winthrop Partners Economic Update 3-8-21

The Markets (as of market close March 5, 2021)

Stocks rebounded in a big way last Monday. Investors may be picking low-hanging fruit following the prior week’s depressed values, or they may have regained confidence in the market despite higher Treasury yields. In any case, each of the benchmark indexes listed here posted sizable gains, led by the Russell 2000 (3.4%), followed by the Nasdaq (3.0%), the S&P 500 (2.4%), the Dow (2.0%), and the Global Dow (1.6%). Yields on 10-year Treasuries dipped, as did the price of crude oil. The dollar inched up 0.2%. The market sectors enjoyed a resurgence as well, with information technology and financials each climbing more than 3.0%.

Monday’s profit-taking market surge was short-lived, as stocks plummeted last Tuesday. Tech shares led the losses, pulling the Nasdaq down 1.7%. The Russell 2000 fell 1.9%, the S&P 500 dropped 0.8%, the Dow lost 0.5%, and the Global Dow dipped 0.1%. Treasury yields fell, as prices climbed on increased demand. Crude oil prices also plunged, and the dollar inched down. Only materials posted a gain among the sectors, while information technology (-1.6%) and consumer discretionary (-1.3%) tumbled.

Last Wednesday marked another rough day for equities. The Nasdaq dropped 2.7%, sinking to a two-month low. The yield on 10-year Treasuries jumped 6 basis points to 1.47%, as investors may be retreating from stocks perceived as overvalued. The S&P 500 declined 1.3%, while the Russell 2000 (-1.1%) and the Dow (-0.4%) also fell. The Global Dow picked up 0.6%. Crude oil prices reversed course from the past few days, surging to over $61.00 per barrel. The dollar gained as well. Among the sectors, energy and financials advanced. Information technology and consumer discretionary each lost more than 2.4%.

Last Thursday, Federal Reserve Chair Jerome Powell did not offer any consolation or planned intervention relative to the volatility in both the equity and the bond markets. Investors, fearing overinflated stock values and potential inflationary pressures, sold equities and bonds, pulling stock prices lower and sending bond yields higher. The Russell 2000 led the dive, falling 2.8%, followed by the Nasdaq (-2.1%), the S&P 500 (-1.3%), the Global Dow (-1.3%), and the Dow (-1.1%). The yield on 10-year Treasuries passed 1.50%, as bond prices plunged. Crude oil prices rose past $64.00 per barrel on word that oil-producing nations had no intention of increasing output. The dollar advanced against a basket of currencies. Among the sectors, energy vaulted up 2.5%, and communication services inched up less than 0.1%. The remaining market sectors declined, with information technology, materials, and consumer discretionary all falling more than 2.0%.

Stocks rebounded last Friday, largely driven by dip buyers, although a favorable jobs
report certainly helped. Nevertheless, each of the benchmark indexes posted solid
gains, with the Russell 2000 leading the way after climbing 2.1%, followed by the S&P
500 (2.0%), the Dow (1.9%), the Nasdaq (1.6%), and the Global Dow (0.5%). Treasury
yields continued to spike, as did crude oil prices and the dollar. Each of the market
sectors advanced, led by energy, industrials, communication services, materials,
consumer staples, and health care, which all gained more than 2.0%.

Investors looking for low-hanging values drove stocks higher last Monday and Friday —
enough to push a few of the indexes into the black by the end of the week. Posting
weekly gains were the Dow, the Global Dow, and the S&P 500. The Nasdaq and the
Russell 2000 could not recover from mid-week sell-offs, ending the week in the red.
Treasury yields continued to surge, driven by concerns that inflationary pressures are
about to rise. Crude oil prices advanced past $66.00 per barrel and have risen nearly
37.0% this year. By comparison, crude oil prices were $45.90 this date last year. The
dollar continued to climb, while gold prices continued to fall. Several of the market
sectors gained ground last week. Energy was the major climber, advancing 10.1%,
followed by financials (4.3%), industrials (3.1%), and communication services (2.4%).
Utilities (-10.7%) and consumer discretionary (-2.8%) fell the most. Year to date, each of
the indexes continued to remain ahead of their respective 2020 closing values, led by
the small caps of the Russell 2000, followed by the Global Dow, the Dow, the S&P 500,
and the Nasdaq.

The national average retail price for regular gasoline was $2.711 per gallon on March 1,
$0.078 per gallon over the prior week’s price and $0.288 higher than a year ago. During
the week ended February 26, crude oil refinery inputs averaged 9.9 million barrels per
day, which was 2.3 million barrels per day less than the previous week’s average.
Refineries operated at 56.0% of their operable capacity last week, down from the prior
week’s rate of 68.6%. Click here for full article:Winthop Partners Economic Update 3-8-21