-
Categories
Weekly Investment Update
The S&P 500 and Dow Jones Industrial Average both rose approximately 1 percent last week as investors tracked progress in Washington toward another round of economic stimulus[1]. As of this writing, the $1.9 trillion bill has been approved by the Senate, and is now back with the House of Representatives for final vote this week before going to President, Joe Biden, for signature. Some key provisions within the bill include:
- Extension of $300 per week in unemployment benefits through early September,
- $1,400 in direct payments to individuals with incomes less than $75,000 ($150,000 for couples),
- Expansion of the childcare tax credit,
- Rental payment assistance,
- Funds for COVID-19 vaccine distribution and testing,
- Funds for state and local governments as well as school systems.[2]
The prospect of increased aid coupled with a potential end to the pandemic in sight has led to increasing US Treasury Bond yields and falling prices. While a higher interest rate environment is generally better for savers and purchasers of bonds in the future, the prices of existing bonds will typically decline in order to match the yield for newly issues securities.
Rising Treasury Yields & Falling Prices
The chart above reflects the price return for a $100 investment in the iShares ETF. Source: Bloomberg
Key Economic Releases This Week
| Day | Report | Period | Consensus Est. | Previous |
|---|---|---|---|---|
| Tuesday, March 9 | NFIB Small Business Optimism | February | 97.0 | 95.0 |
| Wed., March 10 | Consumer Price Index (year-over-year) | February | 1.7% | 1.4% |
| Thurs., March 11 | Initial Unemployment Claims | Week of 3/6/21 | 725,000 | 745,000 |
| Thurs., March 11 | Continuing Unemployment Claims | Week of 2/27/21 | 4.20 million | 4.30 million |
| Friday, March 12 | U. of Michigan Index of Consumer Sentiment | March (prelim) | 78.5 | 76.8 |
| Source: Bloomberg |
Asset Class Returns
| Category | Representative Index | YTD 2021 | Full Year 2020 |
|---|---|---|---|
| Global Equity | MSCI All-Country World | 1.5% | 16.3% |
| US Large Cap Equity | S&P 500 | 2.0% | 18.4% |
| US Small Cap Equity | Russell 2000 | 11.7% | 20.0% |
| Foreign Developed Equity | MSCI EAFE | 1.5% | 7.8% |
| Emerging Market Equity | MSCI Emerging Markets | 1.5% | 18.3% |
| US High Yield Fixed Income | ICE BofAML High Yield Bond | 0.5% | 6.2% |
| US Fixed Income | Bloomberg Barclays US Aggregate Bond | -3.2% | 7.5% |
| Cash Equivalents | ICE BofAML 0-3 Mo Deposit | 0.0% | 0.5% |
| Source: Morningstar as of March 8, 2021 |
Prices & Interest Rates
| Representative Index | Current | Year-End 2020 |
|---|---|---|
| S&P 500 | 3,821 | 3,749 |
| Dow Jones Industrial Avg. | 31,776 | 30,497 |
| NASDAQ | 12,297 | 12,886 |
| Crude Oil (US WTI) | $65.05 | $48.52 |
| Gold | $1,678 | $1,893 |
| US Dollar | 92.31 | 89.94 |
| 2 Year Treasury | 0.17% | 0.13% |
| 10 Year Treasury | 1.59% | 0.93% |
| 30 Year Treasury | 2.31% | 1.65% |
| Source: Bloomberg, US Treasury as of March 8, 2021 |
[1] Source: Morningstar
[2] https://www.wsj.com/articles/whats-new-in-the-third-covid-19-stimulus-bill-11615285802?mod=hp_lead_pos5
Past performance may not be representative of future results. All investments are subject to loss. Forecasts regarding the market or economy are subject to a wide range of possible outcomes. The views presented in this market update may prove to be inaccurate for a variety of factors. These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data. Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.
<!– {"name":"Weekly Investment Blog","type":"layout","children":[{"name":"Top Image (Featured Image)","type":"section","props":{"style":"default","width":"default","vertical_align":"middle","title_position":"top-left","title_rotation":"left","title_breakpoint":"xl","image_position":"center-center","height":"full","padding_remove_top":false,"padding_remove_bottom":false,"image_size":"cover","padding":"xlarge","image_effect":"parallax","image_parallax_bgy_end":"100","image_parallax_bgy_start":"-100","animation":"fade","animation_delay":true,"image_parallax_breakpoint":"m","image_width":"1560"},"children":[{"name":"","type":"row","props":{"layout":"1-3,2-3","divider":true,"vertical_align":true},"children":[{"name":"","type":"column","props":{"image_position":"center-center","vertical_align":"middle","media_overlay_gradient":"","width_small":"1-3"},"children":[]},{"name":"","type":"column","props":{"image_position":"center-center","text_color":"light","vertical_align":"middle","media_overlay_gradient":"","width_small":"2-3"},"children":[]}]}],"source":{"query":{"name":"posts.singlePost"},"props":{"image":{"name":"featuredImage.url","filters":{"search":""}}}}},{"name":"Blog Content","type":"section","props":{"style":"default","width":"default","vertical_align":"middle","title_position":"top-left","title_rotation":"left","title_breakpoint":"xl","image_position":"center-center","padding":"large","padding_remove_bottom":false,"animation_delay":false},"children":[{"name":"","type":"row","props":{"layout":"1-3,2-3","vertical_align":false},"children":[{"name":"","type":"column","props":{"image_position":"center-center","media_overlay_gradient":"","width_small":"1-3"},"children":[{"type":"image","props":{"margin":"default","image_svg_color":"emphasis","image":"wp-content\/uploads\/2020\/06\/Trans_Blue-Crown.png"}},{"name":"","type":"headline","props":{"title_element":"h2","title_decoration":"bullet","title_style":"h3"},"source":{"query":{"name":"posts.singlePost"},"props":{"content":{"filters":{"search":"","date":""},"name":"date"}}}},{"type":"list","props":{"show_image":false,"show_link":true,"image_svg_color":"emphasis","image_align":"left","image_vertical_align":true,"list_size":"","list_element":"ul","column_breakpoint":"m"},"children":[{"type":"list_item","props":{"content":"
Categories”}},{“type”:”list_item”,”source”:{“query”:{“name”:”categories.customCategories”,”arguments”:{“id”:0,”offset”:0,”limit”:10,”order”:”term_order”,”order_direction”:”ASC”}},”props”:{“content”:{“name”:”name”,”filters”:{“search”:””}},”link”:{“name”:”link”,”filters”:{“search”:””}}}}}],”name”:”Blog Category List”}]},{“name”:””,”type”:”column”,”props”:{“image_position”:”center-center”,”media_overlay_gradient”:””,”width_small”:”2-3″},”children”:[{“type”:”headline”,”props”:{“title_element”:”h1″,”content”:”Weekly Investment Update”},”source”:{“query”:{“name”:””},”props”:{“_condition”:{“filters”:{“condition”:”!!”},”name”:”title”}}}},{“name”:””,”type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”
The S&P 500 and Dow Jones Industrial Average both rose approximately 1 percent last week as investors tracked progress in Washington toward another round of economic stimulus[1]. As of this writing, the $1.9 trillion bill has been approved by the Senate, and is now back with the House of Representatives for final vote this week before going to President, Joe Biden, for signature. Some key provisions within the bill include:\n
- \n
- Extension of $300 per week in unemployment benefits through early September,\n
- $1,400 in direct payments to individuals with incomes less than $75,000 ($150,000 for couples),\n
- Expansion of the childcare tax credit,\n
- Rental payment assistance,\n
- Funds for COVID-19 vaccine distribution and testing,\n
- Funds for state and local governments as well as school systems.[2]\n\n
The prospect of increased aid coupled with a potential end to the pandemic in sight has led to increasing US Treasury Bond yields and falling prices. While a higher interest rate environment is generally better for savers and purchasers of bonds in the future, the prices of existing bonds will typically decline in order to match the yield for newly issues securities.”},”source”:{“query”:{“name”:””},”props”:{}}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”
Rising Treasury Yields & Falling Prices”}},{“type”:”image”,”props”:{“margin”:”default”,”image_svg_color”:”emphasis”,”image”:”wp-content\/uploads\/sites\/20\/2021\/03\/Rising-Treasury-Yields-and-Falling-Prices-OneAscent-Weekly-Investment-Update-March-9-2021.png”,”image_alt”:”Line graph depicting rising treasury yields and falling prices of both iShares 7-10 Year Treasury ETF and 10 Year US Treasury Note Yield from January 4, 2021 to March 8, 2021″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”
The chart above reflects the price return for a $100 investment in the iShares ETF. Source: Bloomberg”,”text_size”:”small”}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”
Key Economic Releases This Week”,”css”:”p { \n margin-top: 50px\n}”}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”
\n \n
\n Day\n Report\n Period\n Consensus Est.\n Previous\n\n \n Tuesday, March 9\n NFIB Small Business Optimism\n February\n 97.0\n 95.0\n\n \n Wed., March 10\n Consumer Price Index (year-over-year)\n February\n 1.7%\n 1.4%\n\n \n Thurs., March 11\n Initial Unemployment Claims\n Week of 3\/6\/21\n 725,000\n 745,000\n\n \n Thurs., March 11\n Continuing Unemployment Claims\n Week of 2\/27\/21\n 4.20 million\n 4.30 million\n\n \n Friday, March 12\n U. of Michigan Index of Consumer Sentiment\n March (prelim)\n 78.5\n 76.8\n\n \n Source: Bloomberg\n\n\n”,”text_size”:”small”,”css”:”table.center {\n margin-left:auto; \n margin-right:auto;\n border-collapse: collapse\n \n}\nth {background-color: #13284B; padding:5px }\ntd {padding:5px}\n”}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:” Asset Class Returns”}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”