Investment Strategy

Three Things to Know and Watch

By Bill Hornbarger, Chief Investment Officer Three Things to Know
  • The S&P 500 was up 76% in the year following the pandemic low of March 23, 2020. The second year following post WWII 30% declines (bear markets) stocks were up every time with an average gain of 17%. (Source: CNBC)
  • The Alerian MLP index was up 103.1% for the one-year period ended April 1, 2021. Despite that extraordinary 12-month performance, the index still posts negative returns for three (-2.98%), five (-1.30%) and 10 years (-0.93%). (Source: Morningstar)
  • There are 357 schools that play Division 1 basketball with 13 allotted scholarship players each for a total of 4,641 student-athletes. As of Sunday (April 4) 1,194 players or 25.7% were in the transfer portal looking for another school to play at and the season hasn’t been completed yet. (Source: 247 Sports)
Three Things to Watch
  • Investors will be looking for clues to future monetary policy with minutes of the Feds most recent meeting to be released Tuesday and Fed Chairman Jerome Powell to speak on Thursday.
  • Friday’s March employment report was a blowout and well above consensus. Bonds had a shortened session and a somewhat muted reaction while equities were closed for Good Friday. This week will feature an important reading on the service side of the economy (ISM Services Index) as well as durable goods and capital goods orders on Monday, and Producer Prices (Friday).
  • The impact of the most recent fiscal stimulus should be more visible this week as well as any progress on the administration’s multi-trillion dollar infrastructure plans and proposed tax hikes.
  The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.

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Weekly Market Commentary

By Pete Biebel, Senior Vice President

The major averages went through a lot of gymnastics on their way through last week, a week that ended with two winning indices balancing a couple losers. Prices alternately leapt higher with the flexibility of an acrobat and then tumbled lower with the grace of a rock. A couple midweek stumbles dropped the averages to what would be their lows of the week by Thursday morning. The market apparently wasn’t buying the Powell/Yellen tightrope walk in their Congressional testimony on Tuesday and Wednesday. The market’s routine was going to need a strong finish to save the week. The averages were mixed in Friday afternoon trading when, in the final 75 minutes of the week, stocks vaulted higher into the close, the gymnastic equivalent to nailing the dismount.

The S&P 500 Index (SPX) was just hovering near breakeven for the week on Friday afternoon when the rush of buying began. That late push lifted the index to a 1.57% net gain for the week. The Dow Jones Industrial Average (DJIA) likewise vaulted from near breakeven to a small net gain (+1.36%) for the week late Friday. Both SPX and DJIA ended the week at record highs. The NASDAQ Composite Index (COMP) leapt 1.7% in the final hour-and-a-quarter that afternoon but failed to get back into positive territory for the week. Where COMP slipped 0.58% last week, the Russell 2000 Index of small-cap stocks (RUT) did a face-plant. Despite rallying nearly 2% late-Friday, RUT had a net loss of nearly 3% for the week.

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