April 27, 2021

Weekly Market Commentary April 19th to April 23rd 2021

Markets had a very choppy week. Investors waffled with concerns of new global COVID-19 waves and promising economic data. President Biden’s announcement of a higher-than-expected plan to raise taxes on the wealthy drove markets lower on Thursday before rebounding on Friday. All three major indices fell on the week; the DJIA fell -0.5% while the S&P 500 and the Nasdaq fell -0.1% and -0.3%, respectively. As of the end of this week, 25% of the companies in the S&P 500 have reported earnings. Of those companies, 84% have reported a positive EPS surprise and 77% have reported a positive revenue surprise. There wasn’t much movement in the fixed income markets, 10-Year Treasury Note yields were down 0.02% to 1.56%.

New Home Sales crushed expectations rising 20.7% for the month of March to a 1.021 million annual rate. The three-month average, arguably a more accurate measurement for this series, shows less strength, coming in at 2.6% for March and a 959,000 annual rate. Existing Home Sales declined -3.7% for the month of March. The slide was attributed to higher prices along with higher mortgage rates. While rates have come down about 15 basis points in April, thus far, median home prices have surged. Year-over-year appreciation is 17.5%, well ahead of sales growth of 12.3%.

The Initial Jobless Claims fell more than expected this week coming in at 547,000. Cumulatively, since the beginning of April, initial claims have decreased 182,000 signaling a strong employment report this month amid the continuing rollout of vaccines. Continuing Claims decreased by 34,000 to 3.674 million for the week ending April 10th.

Next week we’ll get the final reading of Q4 GDP, Personal Income and an FOMC announcement.