Performance for Week Ending 4/9/2021:
The Dow Jones Industrial Average (Dow) finished up 1.95%, the Wilshire 5000 Total Market IndexSM (Wilshire 5000SM) added 2.38%, the Standard & Poor’s 500 Index (S&P 500) gained 2.71% and the Nasdaq Composite Index (NASDAQ) finished up 3.12%. Sector breadth was positive with 10 of the 11 S&P sector groups closing higher. The Technology sector (+4.66%) led the way higher followed by Consumer Discretionary (+4.23%) and Communication Services (+3.17%).
||Closing Price 4/9/2021
||Percentage Change for Week Ending 4/9/2021
||Year-to-Date Percentage Change Through 4/9/2021
*See below for Index Definitions
MARKET OBSERVATIONS: 4/5/21 – 4/9/21
The major market indices finished the week higher with the Dow, S&P 500, and Wilshire all closing at new all-time highs. Driving the gains was optimism that government spending, vaccinations and the relaxation of restrictions are unleashing a spell of rapid economic growth. A series of data over the past couple weeks have offered evidence that a rebound in activity and hiring is under way a year after the pandemic slammed the brakes on the economy. Underscoring the better growth outlook, the International Monetary Fund (IMF) upgraded its global economic growth forecast for the second time in three months, and now sees the global economy expanding 6% this year, up from the 5.5% pace estimated in January. That would be the most in four decades of data, coming after a 3.3% contraction last year that was the worst peacetime decline since the Great Depression. For 2022, the fund saw global growth at 4.4%, higher than the 4.2% previously projected.
Policy Will Remain Supportive: The release of the March FOMC meeting minutes showed the central bank’s commitment to maintaining accommodative policy in order to support a full economic recovery. Fed officials indicated that the pace of asset purchases will stay the same for some time while the central bank pursues its economic goals. “Participants noted that it would likely be some time until substantial further progress toward the Committee’s maximum-employment and price-stability goals would be realized and that, consistent with the Committee’s outcome-based guidance, asset purchases would continue at least at the current pace until then,” the meeting minutes read. Policymakers expected the economy to rebound substantially in 2021, and they believe stronger-than-average growth in the following years will continue to help the labor-market heal.
Bullish Narrative Intact: We maintain our favorable view on the equity markets and believe the bullish narrative remains intact. Our upbeat outlook is based on the supportive macro environment which we feel provides a sturdy backbone for additional upside as we look forward. While a near-term period of consolidation cannot be ruled out, we would view pullbacks as corrective in nature and not the start of a broader move lower. Hence, periods of weakness would be viewed as a buying opportunity as we continue to believe the return profile over the next 12-plus months favors additional upside.
The Week Ahead: First quarter earnings season kicks off this week with 24 members of the S&P 500 scheduled to release results. Analysts are expecting a strong quarter with consensus expectations forecasting 23.8% year-over-year growth. It will be a busy week on the data front, which includes several hard data reports from March. Of particular interest will be the March CPI reading on Tuesday, March retail sales on Thursday, and Housing starts on Friday. On the central bank front, we’ll hear from Fed Chair Powell on Wednesday where he is set to take part in a discussion at the Economic Club of Washington. On the same day, the Fed’s latest Beige Book report will be released.
The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally defined as the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.
Wilshire 5000 Total Market IndexSM represents the broadest index for the U.S. equity market, measuring the performance of all U.S. equity securities with readily available price data. The index is comprised of virtually every stock that: the firm's headquarters are based in the U.S.; the stock is actively traded on a U.S. exchange; the stock has widely available pricing information (this disqualifies bulletin board, or over-the-counter stocks). The index is market cap weighted, meaning that the firms with the highest market value account for a larger portion of the index.
Standard and Poor's 500© Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.
This material contains opinions of the author, but not necessarily those of Guggenheim Partners, LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC.
Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC ("Guggenheim"). Guggenheim Funds Distributors, LLC is an affiliate of Guggenheim.
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*Assets under management is as of 3.31.2021 and includes leverage of $15.4bn. Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Fund Management (Europe) Limited, Guggenheim Partners Japan Limited, GS GAMMA Advisors, LLC, and Guggenheim Partners India Management. Securities offered through Guggenheim Funds Distributors, LLC.
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