The markets were mostly flat this week, ending in a mixed picture. The SP500 was unchanged closing at 4181 comparted with 4180, Dow down – 0.5% to 33875 and NASDAQ down – 0.4% to 13963.
The smaller companies were down slightly with mid cap SP400 down – 0.8% and small cap SP600 down - 0.3%.
For the past 3 months, SP500 is up 10.8%, Dow up 12.1%, NASDAQ up 4.2%, SP400 up 14.1% and SP600 up 11.2%
Over the last 6 months, SP500 up 27.9%, Dow up 27.8%, NASDAQ up 28.0%, SP400 up 43.2% and SP600 up 53.5%
In past year SP500 is up 47.7%, Dow up 42.8%, NASDAQ up 62.3%, SP400 up 71.4% and SP600 up 81.9%
For the broad market indices, Dow has been best over the past 3 months, and NASDAQ over the past 6 and 12 months. Based on market cap, the mid cap SP400 did best over the past 3 months and small cap SP600 over the past 6 and 12 months.
For the SP sectors, the past week saw XLB (materials) up 0.1%, XLC (communications) up 2.1%, XLE (energy) up 4.0%, XLF (finance) up 2.5%, XLI (industrial) up 0.3%, XLK (technology) down – 2.1%, XLP (staples) flat at 0.0%, XLRE (real estate) up 1.2%, XLU (utilities) up 0.2%, XLV (health) down - 1.9% and XLY (discretionary) up 0.6%
For 3 months XLB up 16.1, XLC up 14.7%, XLE up 24.8%, XLF up 23.9%, XLI up 18.9%, XLK up 5.7%, XLP up 8.4%, XLRE up 13.8%, XLU up 6.7%, XLV up 5.0% and XLY up 7.6%
Over 6 months XLB is up 31.3%, XLC up 31.9%, XLE up 72.1%, XLF up 51.9%, XLI up 34.3%, XLK up 26.0%, XLP up 11.7%, XLRE up 25.2%, XLU up 6.9%, XLV up 19.3% and XLY up 25.1%
In the past year XLB up 63.4%, XLC up 57.5%, XLE up 37.6%, XLF up 64.3%, XLI up 63.6%, XLK up 57.1%, XLP up 20.8%, XLRE up 30.1%, XLU 19.3%, XLV up 24.0% and XLY up 59.5%.
The relative performance of the sectors was 1 week XLE best and XLK worst, 3 months XLE best and XLV worst, 6 months XLE best and XLU worst and 12 months XLF best and XLU worst.
A number of generally positive economic reports were issued this week.
Durable goods orders for March were up by 0.5% after a drop of 0.9% in February. The orders for US-made capital goods have now risen for 10 of the past 11 months. The increase was led by fabricated metal products. And shipments increased showing broad strength in this area of the economy.
Consumer confidence rose to a 14 month high with the value of 121.7, the highest since February 2020. The March value was 109.0. The consensus expectation value had been 113. The present situation Index climbed from 110.1 up to 139.6 while expectations rose from 18.32 109.8.
The University of Michigan consumer sentiment index also rose in April to 88.3 from a preliminary estimate of 86.5 in the March figure of 84.9. Expectations rose from 79.7 up to 82.7 while current conditions were unchanged at 97.2.
Initial unemployment claims were 547,000, down from 576,000 the previous week. This was a new low for the pandemic area and confirmed the good numbers from last week. Continuing claims were also down 34,000 to 3,670,000. However, there are still 8,000,000 fewer people at work than before Covid.
The advance estimate for the 1st quarter GDP was 6.4%, compared with the value of 4.3% in the 4th quarter of last year.
Personal income was up by 21.1% following a 7% drop in February. This number was boosted by a one-time stimulus check. The savings rate also increased to 27.6% from 13.9%.
Personal spending increased by 4.2% and March after a 1% drop in February. Personal spending is responsible for approximately two thirds of the economic activity in the United States.
The employment cost index, a broad measure of labour costs, climbed by 0.9% in the 1st quarter, the largest rise since the second quarter 2007. This was driven by a 1.0% increase in wages, also the largest in 14 years. The employment cost index is a measure of the slack in the labour market and a predictor of core inflation.
The competing factories in the stock market continued to balance growth in the US economy, caused by the increased vaccination rate, increased number of business openings, and the fiscal stimulus, versus the growth in Covid cases around the world which could dampen global growth and the continued concern around inflation. The Fed meeting this week confirmed its intent to keep interest rates low and to provide economic stimulus as needed. The yield on 10 year Treasury notes ended the week at 1.63, up from a 0.92 at the beginning of the year.
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