Week Ending April 16 Financial Markets Update

The S&P 500 finished the week at all-time highs as retail sales surged and unemployment claims were the lowest on record since the pandemic began. Growth is also inflecting higher internationally with China reporting 18.3% GDP growth in the first quarter. The money center banks unofficially kicked off earnings season with strong results due to loan loss releases, strong investment banking and trading results.
For the week ahead, a bevy of firms will report results likely showing the continued recovery of the U.S. economy. Investors will also closely monitor commentary from the CDC over the paused Johnson & Johnson vaccine.
With continued monetary and fiscal support coupled with a strong consumer ready to spend, equities could continue to touch new highs in the coming months.

Treasury yields dropped moderately amongst longer term yields over the course of the week despite higher inflation numbers and strong economic reports. On Tuesday, the Consumer Price Index rose 0.6%, which was the largest monthly surge since 2012, beating analyst expectations of 0.5%. However, Treasury yields dropped moderately on Tuesday as many bond investors were already pricing in significant inflation, resulting in strong demand for an auction of 30-year Treasurys. On Thursday, Retail Sales rose 9.8%, compared to analyst expectations of 5.0%, but bond investors looked past this report again as yields dropped. Federal Reserve Chairman Jerome Powell said that tapering of asset purchases would come “well before” an increase in interest rates, suggesting that accommodative policies from the Fed would remain for a while. Initial Jobless Claims were 576k, which was well below analyst expectations of 700k.

The interpretations and organizations of these ideas are the confidential thoughts of 1st & Main Investment Advisors and do not represent the opinions of BFCFSDifferent types of investments involve varying degrees of risk including market fluctuation and possible loss of principal value. There can be no assurance that any specific investment strategy will be profitable. *some content provided by First Trust Portfolios L.P.  Member SIPC and FINR

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