In Markets "In a Nutshell"

Markets “In a Nutshell” for March 16, 2021

Investment Week at a Glance

Stocks finished up for the week.  The Dow Jones Industrial Average was up 4.07%, the S&P 500 rose 2.64%, the New York Stock Exchange Composite (2,000 stocks) rose 3.04% and the average investors index (Value Line Index) was up 4.93%.  Foreign stocks (DJ Global ex U.S.) were down 2.52%.  Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 8 basis points higher at 1.64%.  (Data source: Wall Street Journal)

Value Stocks Continue to Shine

Stocks had another positive week as value stocks continued to ignore the volatility in bonds and outperform its growth peers. The technology heavy Nasdaq Index actually fell into correction territory, defined as a fall of 10% from a previous high, before ending the week climbing sharply. Much of the week’s positive news came from the passing of the $1.9 trillion stimulus bill by Congress and subsequent signing by President Biden on Thursday, but the news that mostly sent stocks higher was the tamer than expected inflation data for February that showed that inflation wasn’t rising out of control. With the massive amount of cash being produced by the stimulus bill not going to reflected in any economic data for some time, inflation fears will still be top of mind for many market forecasters, but still looks to be under control for the moment. (Barron’s)

Normal by the 4th of July

The new goal set by the Biden administration is to have enough vaccines available and administered across the nation so that anyone anywhere can gather in groups for the 4th of July. Specifically, the president asked all states to have vaccines available to all adults by May 1st, which provides a tight schedule to get a significant amount of the population fully vaccinated, especially at the current pace being set. Already though, current case counts and hospitalizations have come crashing down across the country, signaling we may be closer to herd immunity than the actual data may show, which isn’t too surprising given the testing struggles experienced early in the pandemic. If states react the way the president is currently hoping for, stocks look relentlessly poised to continue their current positive trend, while some parts of the bond market may continue to struggle for some time. (Barron’s)

 

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Quiz:

As of last Friday, what has been the outperformance of Value stocks over Growth stocks so far this year, as tracked by the Russell 1000? (Scroll Down for Answer)

  1.    2%
  2.    4%
  3.    8%
  4.    10%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

Answer:

4.  The Russell 1000 Value Index has outperformed the Russell 1000 Growth Index by about 10% so far this year, a sharp reversal of the massive outperformance of Growth in previous years. (Barron’s).