Last week I wrote “Has the US stock market made a top? While this is too early to say for now consolidation is very likely at these record-high levels. Bond yields continued to rise this week. And all major news such as the fiscal stimulus and latest earnings reports are now priced in. “

The week the US stock market was mixed with weekly gains for S&P 500 and Dow Jones and losses for the Nasdaq Composite index. Small-cap stocks underperformed. I expect volatility to continue to be present as many investors monitor the rising bond yields.

Economic News

Some key points about Fed's Chair Powell speech the previous week  are:

• “Powell says Treasury bill rates heading lower due to strong demand

Fed Chairman Jerome Powell said strong demand is driving Treasury bill yields close to zero.

“It’s a lot of demand for short-term,” said Powell. “There’s a lot of liquidity, and people want to store it” in Treasury bills. Powell said Treasury instruments are the concern of the Treasury Department, and the Fed is more concerned about keeping its target fed funds rate in its targeted range of zero to 0.25%.

•  “The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain,” 
• “The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,”

These concerns about the path of economic recovery show that a bumpy road is ahead for 2021 for the US economy.

New Home Sales were a miss with a figure of 0.775 M less than the consensus of 0.875 M.

Durable Goods Orders figure was a miss too, coming in at -1.1% compared to the consensus of 0.8%. Markit PMI Composite(Mar) preliminary was a marginal miss with a figure of 59.1 compared to the consensus of 59.2. The Core Personal Consumption Expenditures which serve as an indication for inflation came in at 1.3% less than the consensus of 1.4%.

Gross Domestic Product Annualized (Q4) was a beat coming in at 4.3%, better than the consensus of 4.1%.

Big news about the labor market the previous week. Both Continuing Jobless Claims and Initial Jobless Claims were better than expected. Initial Jobless Claims reported were 684 K, less than the consensus of 730 K. Continuing Jobless Claims came in at 3.87 M less than the consensus of 4.043 M.

Personal Spending and Personal Income were both weak. Finally, the Michigan Consumer Sentiment Index was a beat with a figure of 84.9, higher than the consensus of 83.6.

U.S. Stock Market Weekly Performance

The major US stock market indexes closed as follows on March 26, 2021:

• Dow Jones Industrial Average: Close 33072.88, +1.36% for the week, +8.06% Year-to-date

• S&P 500 Index: Close 3974.54, +1.57% for the week, +5.82% Year-to-date

•  Nasdaq Composite Close 13138.72 , -0.58% for the week, +1.94%, Year-to-date

• Russell 2000: Close 2221.48 , -2.89% for the week, +12.49% Year-to-date

Economic events for the week March 29- April 2, 2021:

Important economic data for the next week will be the weekly Initial and Continuing Jobless Claims, the Housing Price Index, the ISM Manufacturing PMI, the Nonfarm Payrolls, and the Unemployment Rate.

Sources:

https://www.wsj.com/market-data/stocks/us/indexes

https://www.fxstreet.com/economic-calendar