Presented by Matt Glova and the LifeTime Asset Management team:
Weekly Market Update, March 22, 2021
Rates continued to rise last week. On Monday morning, the 10-year Treasury yield opened just below 1.71 percent, an increase of 8.5 basis points from last week’s open of 1.63 percent. The 30-year opened just above 2.41 percent, up from last week’s open of 2.36 percent. Finally, on the shorter end of the curve, the 2-year opened last week at 0.15 percent and remained flat through Monday morning’s open. Despite comments from Federal Reserve (Fed) Chair Jerome Powell, rates did not rise based on inflation concerns. Powell continued to highlight the Fed’s stance of keeping rates low for some time amid uncertainty in its economic forecasts.
Weekly Market Update, March 15, 2021
On Thursday, President Biden signed the American Rescue Plan Act of 2021. The $1.9 trillion stimulus plan will help vaccine distribution and testing, while providing aid to state and local governments, individuals, and businesses. Markets rallied, with the Russell 2000 Index leading the way and posting a weekly gain of more than 7 percent. The aid for small businesses, combined with rising interest rates, supports this index, as it provides exposure to regional banking. The top-performing sectors, which supported a cyclical recovery theme, were real estate, consumer discretionary, utilities, materials, industrials, and financials. The worst-performing sectors were communication services, energy, health care, and technology. Communication services was hit as investors questioned how reopening the economy will affect companies such as Netflix, Facebook, and Disney.
Weekly Market Update, March 8, 2021
Rates continued to rise last week, with the 10-year Treasury yield opening at almost 1.41 percent and closing at 1.59 percent. On Monday morning, the 10-year opened just shy of 1.60 percent, and the 30-year opened at 2.32 percent, up from last week’s open of 2.16 percent. There was a slight increase in yields on the shorter end of the curve as well, with the 2-year yield opening at 0.15 percent. Last week, Federal Reserve (Fed) Chairman Jerome Powell said he expects some transient inflation in the near term. There is a rumor that the Fed may relaunch Operation Twist, which was last launched in 2011 and involved the Fed selling short-term Treasuries and purchasing longer-dated ones to mitigate rising financing costs.
Weekly Market Update, March 1, 2021
Last Saturday morning, the House passed the $1.9 trillion American Rescue Plan, which included the $15 minimum wage. While the minimum wage hike will likely be scrutinized in the Senate, it will be interesting to see how rates and the Federal Reserve react to this round of stimulus.