Telemus Weekly Market Review February 8th - February 12th, 2021

February 8 – February 12 Week in Review

It was another positive week for stocks last week. The small cap Russell 2000 led the way with a 2.5% gain, the tech heavy Nasdaq Composite rose 1.7%, the S&P 500 rose 1.2%, and the Dow Jones Industrial Average rose 1.0%. Each index set intraday and closing record highs during the week.

Most of the week's index gains came on Monday, which was then followed by four days of relatively sideways price action. The market remained supported by a fear of missing out on further gains, optimism surrounding another fiscal stimulus bill, better than expected earnings reports, and increasing COVID-19 vaccination rates and decreasing infection/hospitalization rates.

Also adding to the favorable sentiment was a statement from Treasury Secretary Yellen that the economy can reach full employment in 2022 if a stimulus bill is passed, and Fed Chair Powell reiterating that interest rates will remain near zero until the Fed achieves its dual mandate of maximum employment and a 2.0% plus inflation rate over time.

For the week energy, small-cap, and micro-cap stocks saw big gains, as risk sentiment broadened out. The S&P 500 energy sector rose 4.3%, and the iShares Micro-Cap ETF rose 3.9%. The Philadelphia Semiconductor Index, however, was the biggest gainer with a 7.9% gain amid bullish analyst commentary surrounding NAND prices and a lingering acknowledgement that the industry is overwhelmed with demand.

Conversely, the utilities, consumer discretionary, and consumer staples sectors finished with losses for the week.

Last week also brought some interesting developments for the cryptocurrency space. Tesla disclosed a $1.5 billion investment in bitcoin with plans to accept the digital coin as a payment option, MasterCard said it plans to support cryptocurrencies on its payment network this year, and BNY Mellon reportedly said it will hold, transfer, and issue cryptocurrency for its asset-management clients.

In the bond market the 2 year Treasury yield increased two basis points to 0.109% and the 10 year U.S. Treasury yield increased three basis points to 1.20% amid an uptick in selling interest.

In other markets WTI crude continued its advance closing at $59.73 a barrel, the U.S. Dollar index closed lower at 90.45 and gold prices rose slightly closing at $1,824.80 an ounce.

February 15 – February 19 Economic Calendar