Markets “In a Nutshell” for March 1, 2021
Investment Week at a Glance
Stocks finished down for the week. The Dow Jones Industrial Average was down 1.78%, the S&P 500 fell 2.45%, the New York Stock Exchange Composite (2,000 stocks) fell 2.29% and the average investors index (Value Line Index) was down 1.46%. Foreign stocks (DJ Global ex U.S.) were down 3.84%. Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 10 basis points higher at 1.44%. (Data source: Wall Street Journal)
Yields Continue Sharp Rise
Stocks fell broadly for the week as treasury yields rose again with expectations of stronger economic growth and inflation fears causing the gauge of government borrowing costs to rise. One of the most interest rate sensitive sectors of the stock market, technology, took the news poorly by falling just shy of 5% for the week. While it remains to be seen whether the recent weakness in financial markets will become a much worse trend over the coming weeks, the relentless rise in stock prices since the beginning of November makes a drop in prices more understandable. The next catalyst that could answer the question on where stocks go from here is the jobs report for February that will be released this Friday. The report is expected to show an increase of 200,000 jobs for the month, an increase from January’s rise of just 49,000 jobs, but a small rise in the unemployment rate, signaling that more unemployed job seekers could be actively looking for jobs. (Barron’s)
Johnson & Johnson Provides 3rd Vaccine
The Food & Drug Administration signaled late last week that Johnson & Johnson’s vaccine would win approval, after earlier in the week confirming the effectiveness. This will be the 3rd option for vaccines against COVID-19 in the U.S. and provides the 1st one dose vaccine to hit the market, along with a capable supply chain from Johnson & Johnson that is much more durable and efficient to distribute a vaccine to the masses. While distribution will still likely be slow at first, similar to Pfizer and Moderna in December, Johnson & Johnson’s vaccine provides a much needed boost to the distribution of vaccines to meet current demand and further the progress that is being made in reopening the economy. (Barron’s)
In February, how much did the 10-year U.S. Treasury yield rise? (Scroll Down for Answer)
Have a Great Week!
4. The 10-year U.S. Treasury yield rose 37 basis points in the month of February, the biggest rise in yields since November of 2016. (Wall Street Journal).