Hello and welcome to this week’s Jones Financial Blog! Our goal at Jones & Associates is to help keep you up to date with interesting current economic/market happenings as well as some proprietary portfolio happenings. Knowledge is power and thought we would share some of ours with you. Enjoy!
All data is for the week ended March 26, 2021.
Large cap U.S. stocks led the gains last week, with the S&P 500 rising 1.58%, the NASDAQ easing 0.57% and the Russell 2000 declining 2.88%. Overseas, markets were down, with the international developed stock index (MSCI EAFE) lower by 0.54% and the emerging markets (MSCI EM) dropping 2.15%. In the U.S., the best performing sectors were real estate and staples while communications services and consumer discretionary were the laggards. (1)
Interest rates declined and bond values rose last week, with the benchmark 10-year U.S. treasuries yield down 7 basis points to 1.67%. The yield curve was basically unchanged as rates declined across all maturities. (2)
The price of silver (ETF: SIVR), a Precious Metals strategy holding, fell 4.3% last week on worries about industrial production due to the shortage of semiconductors for auto and electronics manufacturing. (3)
Existing home sales (90% of total home sales) fell 6.6% last month, more than anticipated due to low inventory of homes on the market, horrendous weather in a large swath of the country as mortgage interest rates edged up. Despite the month over month drop, sales rose 9.1% on a year-over-year basis although there was a 30% drop in homes available for sale. The average home price rose 15.8% versus a year ago to $313,000. (4)
Business activity for service providers in early March rose to their highest level in nearly seven years. Service-oriented businesses such as restaurants, resorts, airlines and hotels posted the steepest increase in business in almost three years. Both the IHS Markit service index and its manufacturing index edged higher as the U.S. economy has been reopening and stimulus checks were distributed. (5)
In February, U.S. orders for durable goods were down for the first time in 10 months as severe weather impacted orders across every category except airplanes. Excluding transportation, orders dropped 0.9% in February vs. expectations for a 0.7% gain. The largest drop occurred in vehicle manufacturing which has also been affected by a shortage of semiconductors. (6)
Proprietary portfolio happenings:
Company News (7)
Retail stock holdings across multiple Gradient strategies – including Costco Wholesale Corp. (COST), Dollar General (DG), Dollar Tree, Inc. (DLTR), Home Depot (HD), Lowe’s Companies (LOW), Target Corp. (TGT) and Wal-Mart de Mexico (WMMVY) – rose between 5.1% and 11.6% last week on renewed optimism for consumer spending despite difficult year-over-year comparisons from the spring and summer of last year. The billions in stimulus check to lower- and middle-income households along with expanded unemployment benefits and increased tax credits for families with children have the prospects to boost demand for products sold at these retailers.
Did You Know? Mars is home to the tallest mountain in the solar system.
Olympus Mons, a shield volcano, is 68,897.638 Feet high and 1,968,503.9 Feet in diameter. Despite having formed over billions of years, evidence from volcanic lava flows is so recent many scientists believe it could still be active.
Sources: (1) JP Morgan Weekly Market Recap 3-29-21
(2) US Treasury
(7) All weekly changes in company stock prices: Yahoo Finance