Green Season | April 16, 2021

AUTHOR: Jason J. Roque, MS, CFP®, APMA®, AWMA®
TITLE:       Investment Adviser Rep – CCO
TAGS:   S&P 500, FRB, CPI, Rates, Sentiment

Markets were green as earnings season got under way last week. Should we expect this to continue?


There was very little market data released on Monday. Markets were little changed on the day as the S&P ended in the red by .81 points and the NASDAQ was 0.4% lower.


CPI data rose to 2.5% YoY, the highest level since 2018. As of late, this would have led markets lower. A pause in the Johnson & Johnson vaccine actually caused concern of a slowdown in re-opening. This left the markets room to run higher as future inflation expectations moderated.


Markets floated in the green most of the day as earning season got underway. They slid near the close as jubilee over reduced risk of inflation was viewed as overdone the prior day. Rates rose on the day affirming the inflation trade.


Retail Sales and initial jobless claims boosted the markets at the open. That surge held through the close with NASDAQ leading growth on the markets. Initial jobless claims fell to 576K, the lowest level since the start of the pandemic. Retail sales were expected to grow 5.9%, a healthy rise, however they grew by 9.8%!


Markets rose on Friday to end the week. The rise allowed all three indices to end the week in the positive. Leadership was in the S&P 500 on the day, resuming the re-inflation trade.


The S&P 500 gained over 1% for the week as earnings got underway. Financial companies led the way and impressed on earnings. Expectations will likely rise for them as long-term interest rates have been on the rise. Economic data for the week was generally positive and received as such. This past week was good measure of expectations for this earnings season!

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