Winthrop Partners Market and Economic Update 4-26-21

The Markets (as of market close April 23, 2021)

Stocks retreated from record highs last Monday. The S&P 500 fell 0.5% — its largest single-day drop in nearly four weeks. Small caps and tech shares dove lower, pulling down the Russell 2000 (-1.4%) and the Nasdaq (-1.0%). The Dow slipped 0.4% and the Global Dow was unchanged. Crude oil prices rose and Treasuries advanced, while the dollar fell. Among the market sectors, only real estate was able to post a modest (0.3%) gain. Consumer discretionary plunged 1.1% and information technology declined 0.9%.

Last Tuesday, stocks fell for the second consecutive day, despite an initial round of solid corporate earnings reports. Investors may be concerned that the growing number of virus cases at home and around the world may stunt economic recovery. The small caps of the Russell 2000 dropped 2.0%, followed by the Global Dow (-1.6%), the Nasdaq (-0.9%), the Dow (-0.8%), and the S&P 500 (-0.7%). Among the market sectors, energy plunged 2.7% as crude oil prices sank. Financials declined 1.8%, consumer discretionary dipped 1.2%, and industrials lost 1.1%. Utilities (1.3%) and real estate (1.1%) advanced. The dollar rose slightly, while the yields on 10-year Treasuries fell 2.4%.

Stocks gained last Wednesday for the first time in three days. More favorable earnings reports may have influenced investors, but the greater likelihood for the stock surge can be traced to dip buyers. In any case, the Russell 2000 led the advance, gaining 2.2%, followed by the Nasdaq, which climbed 1.2%. Both the Dow and the S&P 500 increased 0.9%, while the Global Dow moved up 0.3%. Communication services and utilities were the only market sectors to fall. Materials (1.9%), energy (1.5%), industrials (1.4%), and consumer discretionary (1.3%) advanced. Yields on 10-year Treasuries inched up, while crude oil prices and the dollar fell.

Equities tumbled last Thursday following a report that President Biden may propose a substantial increase in the capital gains tax for the wealthy. Each of the benchmark indexes plunged, with the Dow, the S&P 500, and the Nasdaq each falling 0.9%, followed by the Russell 2000 (-0.3%), and the Global Dow (-0.2%). Each of the market sectors also sank, with materials, energy, information technology, consumer discretionary, and financials each declining more than 1.0%. Treasury yields fell, while the dollar and crude oil prices advanced.

Dip buyers pushed stocks higher last Friday following Thursday’s plunge. The Russell 2000 and the Nasdaq climbed the highest, adding 1.8% and 1.4%, respectively. The S&P 500 reached another record high after advancing 1.1%. The Dow climbed 0.7% and the Global Dow gained 0.6%. Treasury yields and crude oil prices rose, while the dollar fell. Nearly all of the market sectors increased, led by financials, materials, information technology, and communication services. Consumer staples and utilities fell.

The possibility of a capital gains tax hike proposed by President Biden sent stocks reeling last week. However, bargain hunters plucked enough low-hanging stocks to push several of the benchmark indexes higher by week’s end. The market sectors closed the week mixed, with real estate and health care leading the way. Energy and consumer discretionary each dropped more than 1.0%. The Dow, the S&P 500, and the Russell 2000 eked out gains last week, while the Nasdaq and the Global Dow lost value. The yields on 10-year Treasuries inched higher. Crude oil prices dropped nearly 2.0%, yet remained over $62.00 per barrel. The dollar fell, while gold prices advanced. Year to date, the small caps of the Russell 2000 remain well ahead of last year’s pace, with the Dow, the S&P 500, and the Global Dow more than 11.0% over their respective 2020 closing marks. The tech-heavy Nasdaq, which was the highest-gaining index in 2020, trails the other benchmarks this year, but still has added nearly 9.0% to its year-end value.

The national average retail price for regular gasoline was $2.855 per gallon on April 19, $0.006 per gallon more than the prior week’s price and $1.043 higher than a year ago. U.S. crude oil refinery inputs averaged 14.8 million barrels per day during the week ended April 16, which was 286,000 barrels per day less than the previous week’s average. Refineries operated at 85.0% of their operable capacity last week. Gasoline production decreased last week, averaging 9.4 million barrels per day.  Click here for the entire article: Winthrop Partners Market nd Economic Summary 4-26-21