Markets “In a Nutshell” for April 5, 2021
Investment Week at a Glance
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 0.24%, the S&P 500 rose 1.14%, the New York Stock Exchange Composite (2,000 stocks) rose 0.44% and the average investors index (Value Line Index) was up 1.10%. Foreign stocks (DJ Global ex U.S.) were up 0.75%. Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 5 basis points higher at 1.72%. (Data source: Wall Street Journal)
Stocks End 1st Quarter on High Note
Stocks rose on the holiday shortened week as the 1st Quarter of 2021 came to a close on Wednesday. The quarter was defined by the rising of the stocks of companies that are poised to benefit the most from the pending economic reopening, like Energy, and the falling of stocks that have benefited the most from increased time at home, like Consumer Staples and Technology. There was very light trading over the course of the past week, but stocks did react positively to the formal announcement from President Biden about a $2.3 trillion infrastructure plan that would be spent over 10 years, but likely target higher taxes on corporations, with a proposed increase of the corporate tax rate to 28% from 21% and increased levies on foreign earnings of domestic companies. For now, it looks like markets are beginning the digest the positive benefits of an infrastructure bill first, which is widely popular, and will likely incorporate the tax increases into company valuations as more specifics details become more clear. (Barron’s)
Jobs Report Impresses
The jobs report for March, released by the Bureau of Labor Statistics last Friday while markets were closed, blew past estimates forecasted by economists and shed a positive light on the devastated labor market. 916,000 jobs were added in the month of March, compared to average estimates of 675,000, and the unemployment rate fell to 6%. Also included in the report were revisions to previous month’s reports in January and February that showed an extra 156,000 jobs were added in early 2021. Most of the jobs gains were in the Leisure, Hospitality and Construction sectors, highlighting the reopening is beginning to pick up momentum nationwide. The report was the best report seen since August of 2020 and provided a significant boost to achieving the goal of getting back to pre-pandemic levels of employment. (Barron’s)
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