- Major market indexes were positive for the fourth week in a row last week. We saw global markets (represented by the MSCI All Country World Index) up 1.5% and domestic stocks (represented by the S&P 500 Index) up 1.4%. International developed companies led the way, up 1.7% for the week.
- Over the last 4 weeks, domestic stocks are up 7.1% while global markets are up 5.2%.
- Similar to the previous week, economic data released last week was very encouraging. We saw retail sales rise 9.8% in the month of March and first-time unemployment claims fall to their lowest level since the beginning of the pandemic. For perspective, the retail sales growth is the second-fastest monthly growth rate in a 30-year period.
- Inflation has been a constant headline over the last two or three months. Last week, it was announced that the Consumer Price Index (CPI) rose 0.6% from February to March and is up 2.6% from the prior year. The 2.6% figure includes energy and food prices, so when we remove those to calculate Core CPI, we saw a 1.6% annual rise.
- Earnings season got off to a strong start with large and regional banks starting to release their results. As expected, the results were very strong and consistent with the expectation of a 25% year-over-year growth rate in corporate earnings.
- China, the world’s second-largest economy, announced an 18.3% rise in its Q1 GDP. While most of that can be attributed to a steep decline in early 2020, it has become clear that 2021 will be a major rebound for both of the world’s largest economic powers.
- The stock market has been calm relative to what we’ve seen over the last 14 months. The Cboe Volatility Index, which is better known as the VIX, is a measure of expectations of short-term market volatility. After falling for several weeks in a row, we now sit at the lowest level since the pandemic began.
- I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
Mike Horwath, CFA
Chief Investment Officer