Chief Economist Scott Brown discusses the latest market data.

Market Commentary
by Scott J. Brown, Ph.D., Chief Economist

The economic data reports were second-tier, leaving market participants to focus on earnings and President Biden’s tax proposal.

New home sales rebounded 20.7%, from weather-related weakness in March, to a 1.021 million seasonally adjusted annual rate. Existing home sales slipped another 3.7%, restrained by a limited number of homes for sale. The Leading Economic Index rose 1.3%, with all 10 components making positive contributions, partly reflecting a rebound from bad weather. Weekly jobless claims fell further, although remain elevated by pre-pandemic standards.

Next week, the Federal Open Market Committee (FOMC) is widely expected to leave short-term interest rates and the monthly pace of asset purchases unchanged, while Chair Powell is unlikely to cover new ground in his press conference (but you never know). The advance estimate of first-quarter gross domestic product (GDP) growth should be quite strong, likely held back by slower inventory growth and a wider trade deficit. Focus is on Private Domestic Final Purchases (consumer spending, business fixed investment and residential fixed investment), which should be a lot stronger. In his address to a joint session of Congress, President Biden will make his case for his infrastructure plan and spending priorities. 

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 04/23/2021

As of close of business 04/22/2021

S&P Sector Performance (YTD) – 04/23/2021

Economic Calendar

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business April 22, 2021.