May 8, 2021 Weekly Market Update. The major U.S. equity markets finished mixed for the week: The Dow Jones Industrial Average +2.67% gain led all the major indices followed by the S&P 500 Index +1.23%; meanwhile the Nasdaq lost ground with -1.51% loss. On the corporate earnings front, the second quarter marked the second-highest increase in the bottom-up EPS estimate during the first month of a quarter since FactSet began tracking this metric in 2002. While the U.S. equity markets should be celebrating the potential for another massive (and unprecedented) stimulus bill of $1.8 trillion, there are strings attached in the form of potential massive tax hikes for corporations, high-earners, and on portfolios. With regards to COVID-19, one-third of the adults are now fully vaccinated while 45% of the population has had at least one shot.
May 1, 2021 Weekly Market Update. The U.S. equity markets finished the week with mixed results led by the S&P 500 +0.02% followed by marginal declines by the Nasdaq (-0.39%) and the Dow Jones Industrial Average (-0.50%). FOMC kept its policy stance unchanged with rates near 0% and also maintained the $120 B in monthly QE buying. The Fed commented "the path of the economy will depend significantly on the course of the virus, including progress on vaccinations." While COVID-19 has resurged in Europe, with particularly horrible outbreak in India, the uptick in U.S. states appear to have a short fuse with J&J vaccine re-released and 43% of the population now having at least one shot. The backbone of the economy has been the consumer and this category is sanguine with almost 11% consumption growth and consumer sentiment sharply higher in April at 121.7. As to the state of the health of the U.S. companies, 86% of the S&P 500 companies have beaten EPS estimates to date for Q1, which is the highest EPS beat % since FactSet began tracking this metric in 2008. However, the market has been reluctant to bring strong rewards given forward-looking concerns over future potential corporate tax rates (and new onerous capital gain tax regimes).