Weekly Market Update
May 3, 2021
Market Data as of Week Ending: 4/30/2021 unless noted otherwise

U.S. stock prices were mixed as most of the major indexes reached new highs before retreating on Friday. Several of the largest companies reported better than expected earnings as 86% of companies in the S&P 500 have reported a positive EPS surprise. The quarterly blended earnings growth is more than 45% and is on track for the highest reported measure since 2010. Size was not a material factor during the week, but value stocks clearly outperformed their growth counterparts. Energy, financials, and communication services were the best performing sectors, while information technology and healthcare lagged. Developed foreign stocks in Europe and Asia underperformed U.S stocks and Emerging Market stocks lagged developed foreign markets.

U.S. Treasury yields rose as favorable economic data and Fed Chair Jerome Powell reiterated no change to policy rates nor the Fed’s asset purchase program. Most government bonds were in negative territory as the 10-year Treasury ended the week at 1.63%. High yield corporate bonds were the best performing asset class and recorded small gains across short, intermediate, and long-term maturities. Investment grade corporate bonds ended the week yielding 2.2% and high yield corporate bonds are yielding nearly 4.3%.

Economic data was headlined by first quarter real GDP that showed the U.S. economy grew by more than 6%. Another positive was that U.S. weekly unemployment claims continued to fall as new claims dropped to 553,000, their lowest level since March 2020. In other positive news, the Conference Board’s index of U.S. consumer confidence reached 121.7 in April, which is the highest level since February 2020. Europe reported a 0.6% decline in first-quarter GDP following a 0.7% decline for the fourth quarter. If the early estimate holds, it will be considered a “double-dip” recession for the region that continues to struggle with vaccine distribution and lockdowns from the coronavirus.