01|26|2021

Persist or Pause? | January 22, 2021

AUTHOR: Kerry J. Hilsabeck, CFP®
TITLE:    Investment Adviser Rep
TAGS:   Unemployment, Consumer Goods & Materials, Non-Defense Capital Goods, Housing & Building, Yield Curve, Manufacturing & Services, S&P 500


Markets rose last week but faded as the days wore on. Can the strength persist or is there reason for a pause?

Monday

Happy Martin Luther King Jr. Day!

Tuesday

The holiday shortened week opened in positive territory as the S&P 500 rose 0.81%. Economic data was light; however, earnings season is well under way, which fostered the gains. Additionally, assisting the markets was the appointment hearings of Dr. Janet Yellen as Treasury Secretary. Investors view her as a dovish selection that would signal loose financial conditions for an extended period of time.

Wednesday

Markets climbed aggressively on Wednesday, led by growth stocks. Economic data was very light on the day with crude oil inventories being the most prevalent data. Inventories rose more than expected causing softness in that market comparatively.

Thursday

Movements within the market were rather muted on Thursday. They ended a shade higher, but not with great momentum. Housing starts were stronger than expected and initial jobless claims, while elevated, came in lower than expected. These economic data points reduce the sense of urgency that may surround further stimulus.

Friday

The close of the week came with little fan fair. The markets shed weight early and rose to recover most losses by the end of the day. The S&P 500 ended the day down 0.32%. PMI data was stronger than expected, as was existing home sales. Stronger data as of late has led to market weakness as it could mean delays on further stimulus.

Conclusion

The week ended with an increase of 1.94%. This was mostly due to a strong Tuesday and Wednesday. Interestingly those days were very light with regards to economic data and were fundamentally trading on strong earnings data. Earnings continue to impress and with a light week of economic data on tap we should continue to see earnings strength drive markets.

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