Market Indexes
The market was split last week, with the Dow and the S&P going positive on Friday’s gains, while the NASDAQ and the Russell small caps fell for the week. The Dow and the S&P both hit new highs. Rising oil prices, spurred on by the Suez ship problem, helped support Friday’s market.
Volatility
The VIX fell 8.8%% this week, ending at $18.86.
High Dividend Stocks
These high dividend stocks go ex-dividend next week: AGNC Investment (NASDAQ:AGNC) Corp AGNC,NLY,ARI,ACRE,TDI,BGS,BCSF,CMO,CHMI,CIM,CCAP,CRT,EARN,LADR,MFA,ORC,ORCC,PSEC,CGBD,SCM,WMC,NRZ .
Market Breadth
22 out of 30 DOW stocks rose this week, vs. 20 last week. 74% of the S&P 500 rose, vs. 57% last week.
FOREX
The US dollar rose vs. most major currencies this week.
Economic News
“The U.S. economy is “much improved,” Federal Reserve Chair Jerome Powell said on Monday, crediting Congress and the central bank both for providing “unprecedented” support, but at the same time warning that the recovery is still “far from complete.”
“The recovery has progressed more quickly than generally expected and looks to be strengthening,” Powell said in remarks prepared for delivery to a congressional hearing on Tuesday morning. Household spending has risen, he said, and the housing sector has more than fully recovered.” Fed policymakers and many private forecasters are expecting a surge in spending and economic growth in coming months as more Americans get vaccinated and venture out.” (Reuters)
“Gross domestic product increased at a 4.3% annualized rate, the Commerce Department said in its third estimate of fourth-quarter GDP growth. That was up from the 4.1% pace reported last month but a sharp deceleration from the record 33.4% rate logged in the third quarter.
Corporate profits were weak last quarter. After-tax profits without inventory valuation and capital consumption adjustment, which correspond to S&P 500 profits, contracted at a 1.7% rate after accelerating at a 36.1% pace in the third quarter. Profits fell 3.3% in 2020 after rising 1.8% in 2019.
But that is all history. The economy is forecast to grow by as much as a 7.5% rate in the first quarter. Growth this year is expected to top 7%. That would be the fastest growth since 1984 and would follow a 3.5% contraction last year, the worst performance in 74 years.” (Reuters)
“U.S. consumer sentiment surged in March by the most in nearly eight years as government pandemic relief payments began padding bank accounts and better-than-anticipated progress on vaccinations against COVID-19 bolstered their outlooks, a closely watched survey said on Friday. The 8.1 point rise was the largest since a matching increase in May 2013, and it brought the index to its highest level since last March, when consumer sentiment began crumbling in the face of the pandemic’s onset.
The University of Michigan’s Consumer Sentiment Index rose to a final reading of 84.9 this month from a preliminary level of 83 at mid-month and from February’s 76.8.” (Reuters)
“The number of Americans filing new claims for unemployment benefits dropped to a one-year low last week as economic activity rebounds after weather-related disruptions in February. Initial claims for state unemployment benefits tumbled 97,000 to a seasonally adjusted 684,000 for the week ended March 20, the lowest level since mid-March. Data for the prior week was revised to show 11,000 more applications received than previously reported.
Economists polled by Reuters had forecast 730,000 applications in the latest week. The decline in claims was led by Ohio, which has been dogged by fraudulent filings. There were also large decreases in California and Illinois.
Claims shot up in the second week of March, likely as backlogs after severe winter storms in Texas and other parts of the densely populated South region were processed. The deep freeze in the second half of February, which also gripped other parts of the country, depressed retail sales, homebuilding, production at factories, orders and shipments of manufactured goods last month.” (Reuters)
Week Ahead Highlights
The Nonfarm Payrolls Report will come out on Friday, but the market will be closed, in observance of Good Friday.
Next Week’s US Economic Reports
Sectors: The Real Estate sector led this week, with most sectors gaining, with Communications Services lagging.
Futures
WTI crude had a big gain Friday, but fell -1.% this week, ending at $60.72.
“Oil prices rose more than 3% on Friday, rebounding on concerns it could take weeks to dislodge a giant container ship blocking the Suez Canal, which would squeeze supplies of crude and refined products. Egypt’s Suez Canal Authority said on Friday operations to free the stranded container ship would resume after completing dredging operations, which are 87% complete.
Of the 39.2 million barrels per day (bpd) of total seaborne crude in 2020, 1.74 million bpd went through the Suez Canal, according to data intelligence firm Kpler. Additionally, 1.54 million bpd of refined oil products flow through the canal, about 9% of global seaborne oil product trade. On Friday, there were ten vessels waiting at the entry points of the Canal carrying around 10 million barrels of oil. Reeling from the blockage in the Suez Canal, shipping rates for oil product tankers have nearly doubled this week, and several vessels were diverted.
The oil markets were also lifted by worries over escalating geopolitical risk in the Middle East. Yemen’s Houthi forces on Friday said they launched attacks on facilities owned by Saudi Aramco (SE:2222).” (Reuters)
