02|23|2021

Weakness Trend? | February 19, 2021

AUTHOR: Jason J. Roque, CFP®, APMA® TITLE:       Investment Adviser Rep – CCO TAGS:   S&P500, energy, economic data

Weakness persisted in the market across last week. Is this a trend that will likely continue or a soft patch in data?

Monday

Happy President’s Day!

Tuesday

Markets were flat to open the week. This was not the case for the energy sector, however, as energy added 2.51% on Monday. Much of the energy move came from the harsh winter storm and elevated energy usage information that should follow. Financials and communications were the only other sectors in the green for the day.

Wednesday

The day started lower and spent the trading day pulling out of the hole. It ended the day even. There was unexpected strength in producer prices (a leading indicator of inflation), retail sales, and capacity utilization (an indicator of corporate production).

Thursday

Much like Wednesday, Thursday opened in a hole and spent much of the day climbing out. Markets did not make it all the way out, however. Housing data and jobs data were both in focus. Building permits rose more than expected, however new starts decreased substantially. Jobless claims, a major focus right now rose more than expected. The weakness of data led to a softer market for the day. As of late this would have caused a market rise as it would have increased the likelihood of stimulus. Perhaps that is a foregone conclusion at this time.

Friday

Services data and existing home sales both impressed for Friday. Markets opened in the green but were unable to hold the momentum. They faded to breakeven and fell into the red to end the week. Signaling an indication of concern for the weekend news cycle.

Conclusion

Investor behavior throughout the week seemed to signal initial concerns, but with persistent buying. Across the week markets ended up shedding 0.72%. This was not much of a move. Buy sentiment persisted even in the face of weak economic data last week. Overall data has shown to be improving quicker than expected. This should lend itself to a continued rally.

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