The S&P 500 traded lower on all four days during the holiday-shortened week as bond-proxies and information technology stocks moved lower on higher treasury yields. While the broad market moved lower, more cyclical exposed areas of the market posted strong gains including energy, financials, and small caps. Economic datapoints remained strong with PMIs showing strong expansion and retail sales far exceeding even the most optimistic forecasts. Clean energy shares were sharply lower during the week as renewables were partially to blame for the Texas blackout. Key on investors’ minds for the week ahead will be Jerome Powell’s report in front of congress on Tuesday and a likely first vote on Joe Biden’s $1.9 trillion stimulus package.
In other news we found a podcast featured in the Wall Street Journal on Thursday the 18th insightful and wanted to share it with you. It helps to shed light on the ‘free’ trading structure and payment for order flow as it relates to the Robinhood trading app platform. Link below:
Yields continued to rise as bond prices are falling amid rising expectations for increased inflationary pressure. The curve steepened with longer-dated bonds commanding ever higher yields as investors are favoring short-dated bonds for defensive investments as a result of inflation concerns.
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