Telemus Weekly Market Review April 19th - April 23rd, 2021

    | May 14, 2021

    April 19 – April 23 Week in Review

    The stock market finished mixed and little changed in a week marked by consolidation activity and talk of a tax increase. The S&P 500 fell 0.1%, the Dow Jones Industrial Average lost 0.5%, and the Nasdaq Composite dropped 0.3%. Only the small cap Russell 2000 finished in positive territory, gaining 0.4%.

    The S&P 500 energy, consumer discretionary, and utilities sectors led the losers closing lower by at least 1.0%. The health care and real estate sectors were the largest gainers.

    Week in Review (1)

    It probably shouldn’t be much of a surprise that the market took a breather. The S&P 500 was up 7.0% over the prior four weeks with roughly 95% of its components trading above their 200-day moving averages. Sentiment had gotten really bullish, too, reinforcing the view that the market was due for some sideways action or a pullback.

    The market took the sideways route, seemingly impervious to selling interest. There was one day of noticeable selling, though, and that was on Thursday after a Bloomberg report that President Biden was planning on proposing increasing the capital gains tax rate to 39.6% from 20.0% for those earning $1 million or more.

    This rate would be bumped to 43.4% when including the 3.8% tax on investment income that funds the Affordable Care Act -- and that's before state taxes are applied. Based on the facts that The New York Times published a similar report earlier in the day and that this was a part of the president's campaign, the news was viewed as a convenient excuse to take profits.

    True to recent form, though, investors bought the dip on Friday amid optimistic undertones made up of speculation that negotiations could reduce the rate, strategies to work around the taxes will be found, and observations about the market's historical ability to weather tax increases.

    In other key developments last week, earnings reports continued to beat expectations for the most part, weekly initial claims fell to a new post-pandemic low at 547,000, and new home sales surged to their highest annual rate since August 2006.

    On the interest rate front both the 2 year Treasury yield and 10 year Treasury yield closed basically unchanged at 0.158% and 1.57% respectively in a range bound trading week.

    In other markets the U.S. Dollar Index fell closing at 90.83, WTI crude closed lower at $62.04 a barrel and gold was basically unchanged finishing at $1,776.80 an ounce.

    April 26 – April 30 Economic Calendar

    • Monday
    •       Durable Goods Orders
      8:30 AM ET
    • Dallas Fed Manufacturing Survey
      10:30 AM ET  

    •    Tuesday  
    • FOMC Meeting Begins

    • Redbook
      8:55 AM ET

    • Case-Shiller Home Price Index
      9:00 AM ET
    • FHFA House Price Index
      9:00 AM ET
    • Consumer Confidence
      10:00 AM ET
    • Richmond Fed Manufacturing Index
      10:00 AM ET
    • Money Supply
      1:00 PM ET
    • Wednesday
    • MBA Mortgage Applications
      7:00 AM ET
    • International Trade in Goods (Advance)
      8:30 AM ET

    • Retail Inventories (Advance)
      8:30 AM ET
    • Wholesale Inventories (Advance)
      8:30 AM ET

    • State Street Investor Confidence Index
      10:00 AM ET
    • EIA Petroleum Status Report
      10:30 AM ET
    • Survey of Business Uncertainty
      11:00 AM ET
    • FOMC Announcement
      2:00 PM ET
    • Fed Chair Press Conference
      2:30 PM ET
    • Thursday



                                
      Thursday






    • GDP
      8:30 AM ET

    • Jobless Claims
      8:30 AM ET
    • Pending Home Sales Index
      10:00 AM ET
    • EIA Natural Gas Report
      10:30 AM ET


    • Fed Balance Sheet
      4:30 PM ET







      •         Friday       
      • Employment Cost Index
        8:30 AM ET
      • Personal Income and Outlays
        8:30 AM ET

      • Chicago PMI
        9:45 AM ET

      • Consumer Sentiment
        10:00 AM ET
      • Baker Hughes Rig Count
        1:00 PM ET
      • Farm Prices
        3:00 PM ET
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