In Markets "In a Nutshell"

Markets “In a Nutshell” for May 3, 2021

Investment Week at a Glance

Stocks finished mixed for the week.  The Dow Jones Industrial Average was down 0.50%, the S&P 500 rose 0.02%, the New York Stock Exchange Composite (2,000 stocks) rose 0.08% and the average investors index (Value Line Index) was down 0.25%.  Foreign stocks (DJ Global ex U.S.) were down 0.44%.  Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 7 basis points higher at 1.65%.  (Data source: Wall Street Journal)

Stocks Fall Despite Good News

Despite largely positive news from the economy and company’s earnings reports last week, stocks continued the minor trend of weakness over the past couple of weeks and ended slightly lower to flat for the week. The biggest tech companies in the country reported blowout earnings reports for the 1st Quarter, proving that the companies that surged as the pandemic began will continue to succeed as the economy opens back up. 1st Quarter GDP was also released and showed the economy growing a 6.4% annualized rate in the first three months of the year, but slightly below expectations of 6.7%. Consumers were the driver of growth in the quarter, with consumer spending being driven by stimulus checks and more states reopening businesses. While the prospect of higher taxes that were announced weeks ago may still be dampening the optimism that existed in markets and creating weakness among stocks, the economy continues to show signs of booming for the time being. (Barron’s)

April Jobs Report

The April jobs report will be released this Friday and is expected to show another massive gain in jobs for the month, with a total consensus estimate by economists of 975,000 jobs being added. This would bring the unemployment rate down to 5.8% from 6% and keep the incredible pace of gains intact. The April report would be the first monthly jobs report to include the substantial fall in weekly unemployment claims that has occurred in recent weeks, which have been sending very positive signals about the labor market. One other key metric to watch will be the participation rate, which shows how many workers are beginning to look for jobs after leaving the labor force during the pandemic. A rise in that rate would show that people are more comfortable about their job prospects and feeling confident enough in the economy as vaccinations have begun to protect the most vulnerable populations. (Barron’s)



What has been the top performing sector so far for the S&P 500 year-to-date? (Scroll Down for Answer)

  1.   Communication Services
  2.   Energy
  3.   Financials
  4.   Information Technology
























Answer below.



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2.   Energy continues to be the best performing sector year-to-date, returning 31.3%. (Morningstar).