The markets were mixed this week with SP500 closing at 3975, up 1.6%, Dow up 1.4% to 33073 and NASDAQ down – 0.6% to 13139.
The smaller companies were similar to large caps with mid cap SP400 up 0.5% and small cap SP600 down – 1.8%.
For the past 3 months, SP500 is up 6.4%, Dow up 8.9%, NASDAQ up 1.9%, SP400 up 13.7% and SP600 up 18.3%
Over the last 6 months, SP500 up 18.6%, Dow up 19.9%, NASDAQ up 18.2%, SP400 up 41.2% and SP600 up 55.1%
In past year SP500 is up 51.3%, Dow up 48.1%, NASDAQ up 69.0%, SP400 up 80.1% and SP600 up 94.3%
For the broad market indices, DOW has been best over the past 3 months, SP500 over the past 6 and NASDAQ over the past 12 months. Based on market cap, the small cap SP600 did best over the past 3, 6 and 12 months.
For the SP sectors, the past week saw XLB (materials) up 2.2%, XLC (communications) down – 4.1%, XLE (energy) up 1.8%, XLF (finance) up 0.6%, XLI (industrial) up 1.9%, XLK (technology) up 2.4%, XLP (staples) up 3.3%, XLRE (real estate) up 3.4%, XLU (utilities) up 2.1%, XLV (health) up 1.7% and XLY (discretionary) down – 0.2%
For 3 months XLB up 11.8%, XLC up 7.1%, XLE up 33.0%, XLF up 18.2%, XLI up 11.6%, XLK up 1.7%, XLP up 1.9%, XLRE up 10.2%, XLU up 3.3%, XLV up 4.7% and XLY up 4.0%
Over 6 months XLB is up 25.5%, XLC up 21.9%, XLE up 63.1%, XLF up 42.7%, XLI up 26.2%, XLK up 14.3%, XLP up 7.5%, XLRE up 13.0%, XLU up 7.8%, XLV up 12.5% and XLY up 13.1%
In the past year XLB up 74.4%, XLC up 63.2%, XLE up 76.2%, XLF up 60.8%, XLI up 64.4%, XLK up 62.0%, XLP up 23.4%, XLRE up 24.7%, XLU 10.1%, XLV up 31.5% and XLY up 65.9%.
The relative performance of the sectors was 1 week XLRE best and XLC worst, 3 months XLE best and XLK worst, 6 months XLE best and XLP worst and 12 months XLE best and XLU worst.
Housing reports were negative this week, starting with existing home sales down 6.6% in February although still 9.1% higher than one year ago. Housing inventory is down 29.5% over the year to a record low. New home sales dropped 18.2% in February but 82% above least year at the same time. Inventory remains tight. The markets appeared to believe that much of the drop was due to bad weather.
Durable good orders were down 1.1%, the first drop after 9 consecutive months of increases. Shipments were also down 3.5%. The largest decrease was in transportation.
There was good news in employment. The weekly unemployment claims reached a new pandemic-era low at 684,000 compared with a revised 781,000 from last week. Continuing claims were also lower a 3.87 million compared with 4.13 million. The same week in 2020 saw 3 million new claims. For perspective, the average weekly claims in 2019 were around 200,000 and the peak in the Great Recession was 665,000.
Personal income was down 7.1% in February with disposable income down 8%. Consumer spending was also down by 1.0%.
The final fourth quarter GDP revision was up by 0.2 to 4.3%. For the year, GDP dropped 3.5%, the largest since 1946 when there was an 11.6% decrease.
Core inflation was up a modest 1.6%
The final consumer sentiment index was 84.9, up 8.1 from February. This value is still well below the level pre-pandemic and 1.5% below the average since 1978.
The markets fluctuated this week before ending with record highs for the SPX and DOW. The current bull market started one year ago on March 23, when the DOW had fallen from around 29,00 to around 18,000 in several weeks when the impact of COVID was being realized.
Positive factors are the increased number of vaccinations, the arrival of stimulus checks and some state relaxing some restrictions. The FED stated that it will support the economy as long as needed.
This outlook must be balanced by a risk of increasing inflation. The yield on the 10 year Treasury note did drop to 1.658.
These competing values will continue to battel for supremacy in upcoming weeks.
Stock Wealth Safely this week
There were two Stock Wealth Safely winners this week. COST hit a 5% gain 2 weeks after selection, with the SPX gaining 0.3% during that time, and NOC reached its 5% target 13 weeks from selection (SPX rose 4.7%).
New Stock Wealth Safely selections were PKI and TAP.
Stock Wealth Safely shows you how to invest safely in the stock market.