Weekly Investment Update

Last week, risk assets generally trended sideways as investors watched for progress on the COVID-19 vaccine roll-out and a new fiscal stimulus bill. The S&P 500, a broad basket of large US companies, has advanced more than 4% so far in 2021. However, many indices and asset types that are more correlated to an economic recovery, such as small cap US stocks and emerging market stocks have risen double-digits.[1] It seems as though, for at least the time being, the market baton has been passed to more cyclical companies as investors, in aggregate, may be anticipating more economic growth ahead.

This week, the Conference Board will release its composite of Leading Economic Indicators. The series is comprised of data that is expected to be predictive of the trend of future economic growth. It includes items related to labor market conditions, manufacturing, housing, and lending conditions (amongst others). The index has been trending up since last spring, implying continued stable economic conditions to come.

Conference Board Leading Economic Index

Line graph depicting Conference Board Leading Economic Index from December 1999 to December 2020

Source: Bloomberg

Key Economic Releases This Week

Day Report Period Consensus Est. Previous
Monday, Feb. 22 Leading Economic Indicator (monthly change) January 0.4% 0.3%
Thursday, Feb. 25 Durable Goods Orders (monthly change) January 1.1% 0.5%
Thursday, Feb. 25 Continuing Unemployment Claims Week of 2/13/21 4.42 million 4.94 million
Friday, Feb. 26 Personal Income (monthly change) January 9.5% 0.6%
Friday, Feb. 26 Personal Spending (monthly change) January 2.4% -0.2%
Source: Bloomberg

Asset Class Returns

Category Representative Index YTD 2021 Full Year 2020
Global Equity MSCI All-Country World 5.3% 16.3%
US Large Cap Equity  S&P 500  4.2% 18.4%
US Small Cap Equity  Russell 2000 14.9% 20.0%
Foreign Developed Equity MSCI EAFE 4.1% 7.8%
Emerging Market Equity MSCI Emerging Markets 10.9% 18.3%
US High Yield Fixed Income ICE BofAML High Yield Bond 1.3% 6.2%
US Fixed Income Bloomberg Barclays US Aggregate Bond -1.8% 7.5%
Cash Equivalents ICE BofAML 0-3 Mo Deposit 0.0% 0.5%
Source: Morningstar as of February 19, 2021

Prices & Interest Rates

Representative Index Current Year-End 2020
S&P 500 3,907 3,749
Dow Jones Industrial Avg. 31,433 30,497
NASDAQ 13,576 12,886
Crude Oil (US WTI) $59.24 $48.52
Gold $1,776 $1,893
US Dollar 90.36 89.94
2 Year Treasury 0.11% 0.13%
10 Year Treasury 1.34% 0.93%
30 Year Treasury 2.14% 1.65%
Source: Bloomberg, US Treasury as of February 19, 2021

[1] Source: Morningstar

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.   

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