The ETF Investor Guide for April 2021

The ETF Investor Guide for April 2021

The April Issue of the ETF Investor Guide is AVAILABLE NOW! Links to the April Data Files have been posted below. Market Perspective: Tech Rebounds as Yields Moderate Interest rates stabilized, […]

Market Perspective for April 27, 2021

The week started with record gains for the S&P 500 as stocks traded higher. The S&P 500 gained 0.18 percent on Monday, while the Nasdaq closed up 0.87 percent. Indicating a strong performance day for small-cap stocks, the Russell 2000 Index increased 1.15 percent on the day. The Dow Jones Industrial Average lost 0.18 percent.

Inflation trades dominated the day. SPDR Energy (XLE) increased 0.67 percent, SPDR Materials (XLB) 0.59 percent and SPDR Technology (XLK) 0.51 percent. Lumber gained another 3.50 percent on Monday, lifting the 1-year return to 335 percent. Copper broke out to a new 52-week high and is approaching its all-time high set in 2011. It has risen 90 percent in the past year.

Economic data out on Monday showed that durable goods orders fell well behind the expected 2.3 percent increase over the month with a 0.5 percent increase. With transportation excluded, the durable goods orders increased by 1.6 percent.

For the Dow, Procter & Gamble (PG) stock dropped majorly by 2.02 percent on the day, and Coca-Cola (KO) stock likewise fell by 1.46 percent on Monday, which dragged the index down overall. American Express (AXP) shares saw a 4.2 percent increase.

Spotify (SPOT) was a major winner on Monday with a gain of 4.9 percent on the heels of news that a subscription price increase for the audio-streaming service is on the horizon.

Microsoft Corporation (MSFT) shares gained 0.15 percent on the day, Facebook (FB) shares 0.63 percent and Amazon (AMZN) 2.04 percent. Alphabet Inc. (GOOG), likewise rose 0.43 percent on the day, while Netflix (NFLX) shares gained 0.94 percent.

On Monday, the 10-year Treasury note yield closed around 1.57 percent, with an increase of 0.3 basis points for the day.

On Monday, crude oil futures (CL=F) had a slight dip of 0.32 percent, down to $61.94 a barrel. However, the Energy Select Sector SPDR Fund (XLE) increased 0.67 percent on the day.

Gold futures (GC=F) increased 0.16 percent to $1,780.60 per ounce on Monday.

For the coming week, the Federal Reserve meets next on Wednesday, at which time Chairman Jerome Powell is expected to confirm the Fed’s plans to stay the course in terms of delaying any potential increase in interest rates. The target inflation rate for the Fed remains at 2 percent so far pending any unexpected announcements of a policy change.

On Wednesday, President Biden is planned to speak to Congress regarding the administration’s substantial infrastructure spending plan as well as proposed tax reforms, including a potential increase on the capital gains tax to 39.6 percent for those individuals earning at least $1 million per year and a reversion of the corporate tax rate to 28 percent from the current 20 percent.

The initial estimate of first quarter GDP will come on Thursday. The consensus is looking for 6.5 percent growth.

Investors are awaiting first quarter earnings results for major tech companies this week. Since the start of this earnings reporting season, about 84 percent of reporting companies have posted positive growth for the first quarter.

Tesla (TSLA) kicked off a heavy earnings week with an earnings beat, but shares fell around 2 percent in after-hours trading because all its profit came from selling regulatory credits

Tuesday brings results from Microsoft (MSFT), Alphabet (GOOGL), Advanced Micro Devices (AMD), Visa (V), Pinterest (PINS), Texas Instruments (TXN), General Electric (GE), Amgen (AMGN), Raytheon (RTX), Starbucks (SBUX), Eli Lilly (LLY), United Parcel Service (UPS) and 3M (MMM).

On Wednesday, we’ll hear from Apple (AAPL), Facebook (FB), Boeing (BA), Shopify (SHOP), Qualcomm (QCOM), Spotify (SPOT), Ford (F), Align Technology (ALGN) and Boson Scientific (BSX).

Amazon (AMZN), Microvision (MVIS), Bristol-Myers Squibb (BMY), Mastercard (MA), Twitter (TWTR), Caterpillar (CAT), Comcast (CMCSA), Merck (MRK) and McDonald’s (MCD) headline Thursday’s reports.

Oil giants Exxon (XOM) and Chevron (CVX) close out the week along with Abbvie (ABBV), Clorox (CLX), Colgate-Palmolive (CL) and Illinois Tool Works (ITW).

Market Perspective for April 25, 2021

Small-cap stocks led the way for gains across the major indexes on Friday to wrap up the trading week. The S&P 500 gained 1.09 percent, the Dow 0.67 percent and the Nasdaq 1.44 percent for the day. The Russell 2000 increased 1.76 percent on Friday. iShares MSCI EAFE ETF (EFA) also rose 1.02 percent on Friday.

The Russell 2000 Index gained 0.55 percent on the week, while the S&P 500, Nasdaq and Dow Jones Industrial Average fell 0.13 percent, 0.25 percent, and 0.43 percent, respectively.

Investors bought healthcare stocks this week, sending SPDR Healthcare (XLV) up 1.80 percent. iShares U.S. Medical Devices (IHI) climbed 2.77 percent, SPDR S&P Biotech (XBI) 2.13 percent and iShares U.S. Pharmaceuticals (IHE) 1.00 percent. SPDR Industrials (XLI) advanced 0.43 percent and SPDR Materials (XLB) 0.33 percent.

Netflix (NFLX) and Intel (INTC) both disappointed investors with their guidance. Netflix also delivered much less subscriber growth than anticipated. Netflix fell 7.52 percent and Intel 8.51 percent on the week. SPDR Technology (XLK) dipped 0.42 percent and SPDR Communication Services (XLC) 0.48 percent.

Mattel (MAT) shares increased 0.81 percent after positive sales reports for the first quarter beat consensus expectations on the toy-maker’s earnings. Likewise, Snap (SNAP) shares surged 7.45 percent on Friday based on its continued stream of new users and heightened earnings above consensus estimates.

Although there were a couple of high-profile earnings misses from Netflix and Intel, the overall earnings seasons remains strong. This week’s results boosted the S&P 500’s blended earnings growth rate (reported and remaining estimates) to 33.8 percent versus the first quarter of 2020. Analysts predicted the S&P 500 companies would grow earnings 23.8 percent coming into earnings season.

On Friday, crude oil futures (CL=F) saw an increase of 0.99 percent to $62.04 a barrel. The Energy Select Sector SPDR Fund (XLE) also increased 0.91 percent on Friday.

Gold futures (GC=F) dropped 0.3 percent to $1,776.70 per ounce on Friday.

On Friday, the 10-year Treasury note yield closed at 1.57 percent. It has declined steadily through April.

Economic data released during the week indicated that initial jobless claims for the prior week beat the expected 610,000 at only 547,000 new claims. The latest data on continuing jobless claims was only slightly off from the expected 3.650 million at 3.674 million.

Markets resisted news over the week that President Biden plans to increase taxes, including the capital gains tax rate from 20 percent to 39.6 percent for individuals earning at least $1 million a year. In addition, the Biden administration has floated an increase for the corporate tax rate from 21 percent to 28 percent.

IHS Markit reports on Friday showed that the U.S. manufacturing and service sectors output levels are at record highs due to widespread economic re-openings and broad progress on mass vaccinations in the U.S. The April preliminary purchasing managers’ index (PMI) for the manufacturing sector increased from 59.1 in March to 60.6. Similarly, the PMI for the services sector rose from 60.4 to 63.1 in April, indicating the fastest growth rate in nearly 12 years. The U.S. services sector saw even faster growth, with the PMI rising to 63.1 from 60.4 in March. This was faster than the 61.5 expected, according to Bloomberg data, and also marked a series high.

Existing home sales hit an annualized pace of 6.01 million in March, down slightly from February. New home sales spiked to an annualized pace of 1.02 million though, the highest reading since 2006. The difference is in part due to how these data are collected. The former data set waits until a sale is final before counting it, while the new home sales report goes by contract signings.

For the coming week, economic data to be released includes the latest levels of personal income and spending, GDP and inflation.

The Investor Guide to Vanguard Funds for April 2021

The Investor Guide to Vanguard Funds for April 2021

The Investor Guide to Vanguard Funds for April is AVAILABLE NOW! Links to the April data files are posted below. Market Perspective: Stocks Jump as Economy Reopens After a mid-March low […]