Weekly Market Commentary – 3/12/2021

-Darren Leavitt, CFA

The S&P 500, Dow, and Russell 2000 equity indices made fresh all-time highs for the week while the NASDAQ rebounded from its sell-off over the last couple of weeks.  President Biden signed the 1.9 trillion dollar stimulus bill and announced that vaccinations would be available to all adults by May 1st.  Lockdown measures continued to be relaxed across the country as infection rates decline.

Optimism surrounding the re-opening of the global economy coupled with more fiscal stimulus pushed the 10-year bond yield to levels not seen since February of 2021. Additionally, the European Central Bank announced that it would increase their asset purchase program’s pace to help further stimulate their economies. US economic data for the week showed an increase in consumer sentiment, better than expected initial claims, and hints of some inflation at the producer level.

For the week, the S&P 500 gained 2.6%, the Dow increased 4.1%, the NASDAQ rose 3.1%, and the Russell 2000 outperformed with a 7.3% return.  Cyclical sectors continued their outperformance while mega-cap growth stocks lagged, especially on Friday as interest rates spiked higher.  The 2-year note yield fell one basis point to 0.14%, and the 10-year bond yield increased by nine basis points to close at 1.64%.  The US Treasury auctioned 3, 10, and 30 year paper on the week, but the supply was met with decent demand.  Gold prices inched higher by $21.10 to close at $1719.60 an Oz. Price action in oil was muted, with WTI prices falling $0.50 to close at $65.59 a barrel.

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