Markets “In a Nutshell” for April 19, 2021
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 1.18%, the S&P 500 rose 1.37%, the New York Stock Exchange Composite (2,000 stocks) rose 1.44% and the average investors index (Value Line Index) was up 1.38%. Foreign stocks (DJ Global ex U.S.) were up 1.48%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 8 basis points lower at 1.59%. (Data source: Wall Street Journal)
Economic Data Sparks Optimism
Stocks soared on wildly outperforming economic data for the week in a sign that the economy has truly begun to boom. Consumer spending, the largest contributor to economic growth in the U.S., rose almost 10% for the month of March on the back of the massive $1.9 trillion stimulus plan that was passed. The spending figure was roughly double what was expected by economists and immediately forced forecasts for overall economic growth to be revised higher and ultimately lifted stocks, as well. Another incredibly positive sign for the economy was the steep drop in initial unemployment claims that fell way beyond expectations and gave new hope that the labor economy is really starting to heal after almost a year of remaining above an all-time level. While the economic data was just about as good anyone could have hoped for, fears of possible high inflation still loom over the otherwise breakout economy and could hinder the economy as the year progresses. (Barron’s)
Quarterly Earnings Season Begins
1st quarter earnings began to be reported last week and are poised to show massive gains, especially for companies that began to be deeply affected by the pandemic a year ago. The largest banks in America are traditionally the first to report and almost all handily beat expectations and contributed to the positive momentum that was started by the impressive economic data. As the weeks move on and the majority of companies continue to report results, analysts will get a much better sense of how each company and sector is going to perform as we finally see the light at the end of the tunnel for the pandemic. (Barron’s)
What is the estimated amount of tax revenue the IRS loses on an annual basis due to fraud, errors and lack of resources? (Scroll Down for Answer)
Have a Great Week!
4. It is estimated that the IRS has losses of about $1 trillion annually due to fraud, errors and lack of resources. (Barron’s).