Telemus Weekly Market Review February 1st - February 5th, 2021
February 1 – February 5 Week in Review
It was another winning week for the stock market as it rebounded swiftly from the prior week's decline. The S&P 500 finishing higher in all five sessions and ended the week with a 4.7% gain, the small cap Russell 2000 gained 7.7%, the tech heavy Nasdaq Composite gained 6.0%, and the Dow Jones Industrial Average gained 3.9%.
All 11 S&P 500 sectors posted weekly advances, ten of which rose between 2.3% (utilities) and 8.3% (energy). The health care sector (+0.5%) underperformed.
Positive factors last week included shares of GameStop reverting to the mean, better than expected earnings reports, encouraging economic data, reports of increasing vaccination rates, and persistent expectations for additional fiscal stimulus. Also of note the CBOE Volatility Index dropped 36.7% to 20.95, as investors dialed back hedging exposure.
Economic data, good or not so good, was construed as positive for the market because (1) if it was good, it showed the economy was improving, which would suggest greater earnings potential and (2) if it wasn't, it supported the thesis for additional fiscal stimulus.
The January ISM Manufacturing and Non-Manufacturing PMIs came in above 50.0% (expansionary territory) for the eighth straight month. The labor market, on the other hand, remained sluggish, and the Congressional Budget Office said it doesn't expect employment to recover to pre-pandemic levels until 2024. Nonfarm payrolls increased by 49,000 following a 227,000 decline in December, while the unemployment rate improved to 6.3% from 6.7% in December.
On the interest rate front last week the 10 year U.S. Treasury yield increased eight basis points to 1.17% amid persistent selling pressure, as investors continued to bet on improved economic growth. The 2 year yield decreased three basis points to 0.09%.
In other markets WTI crude advanced almost 10% closing at $57.07 a barrel, the U.S. Dollar index closed slightly higher at 91.0 and gold prices fell closing at $1,815.20 an ounce.
February 8 – February 12 Economic Calendar
- Monday
- PMI Manufacturing Final
9:45 AM ET - ISM Manufacturing Index
10:00 AM ET - Construction Spending
10:00 AM ET
- Tuesday
Redbook
8:55 AM ET
- Wednesday
- MBA Mortgage Applications
7:00 AM ET - ADP Employment Report
8:15 AM ET - Treasury Refunding Announcement
8:30 AM ET - PMI Composite Final
9:45 AM ET - ISM Services Index
10:00 AM ET - EIA Petroleum Status Report
10:30 AM ET
- Thursday
Thursday - Challenger Job-Cut Report
7:30 AM ET - Jobless Claims
8:30 AM ET - Productivity and Costs
8:30 AM ET - Factory Orders
10:00 AM ET - EIA Natural Gas Report
10:30 AM ET - Fed Balance Sheet
4:30 PM ET - Money Supply
4:30 PM ET
- Friday
- Employment Situation
8:30 AM ET - International Trade in Goods and Services
8:30 AM ET - Baker Hughes Rig Count
1:00 PM ET - Consumer Credit
3:00 PM ET
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