Weekly Market Update
April 26, 2021
Market Data as of Week Ending: 4/23/2021 unless noted otherwise

U.S. stock markets retreated slightly from their record highs in an up-and-down week after news of a potential tax hike was released. The proposal would nearly double the long-term capital gains tax rate and raise taxes on higher incomes. First quarter earnings season continues to be off to an outstanding start as 25% of companies in the S&P 500 have reported results, of those, 84% have reported a positive EPS surprise. Medium and small sized companies outperformed their large company peers while growth stocks mostly outperformed value. Health Care and Real Estate were bright spots as both sectors netted solid gains. Energy continued its pullback as oil prices declined on the news of increasing global COVID-19 cases. Emerging Market stocks outperformed both the developed foreign stock market and U.S stock market as the index booked a positive gain.

U.S. Treasury yields continued their decline last week as concerns around the global uptick in COVID-19 cases may have stoked demand for safe haven assets. The 10-year Treasury ended the week at 1.56%. Investment grade corporate bonds ended the week yielding 2.2% and high yield corporate bonds are yielding just above 4.8%.

It was a relatively light economic data week, but what was released was generally positive. U.S. weekly unemployment claims continued to fall as new claims dipped to 574,000, their lowest level since March 2020. The index of U.S. leading economic indicators rose 1.3% in March, suggesting the economy is gathering momentum. The flash reading of the IHS Markit data showed positive results as both the manufacturing PMI and services PMI reached record levels. New home sales surged past expectations as sales occurred at a seasonally adjusted rate of 1.021 million in March, its fastest pace since 2006. As expected, the ECB announced it’s keeping borrowing costs low, saying it would maintain its pace of bond purchases until the eurozone’s economy is firmly on the path to recovery.