The Russell 2000 Index extended its lead in 2021 with an advance of 2.51 percent this week, the Nasdaq added 1.73 percent, the S&P 500 Index 1.23 percent and the Dow Jones Industrial Average 1.00 percent.

Disney (DIS) advanced 3.60 percent this week after it reported strong subscriber growth for its Disney+ streaming service. SPDR Technology (XLK) rose 2.42 percent with continued strong momentum. iShares PHLX Semiconductor (SOXX) jumped 7.83 percent. Holdings such as Applied Materials (AMAT) and Lam Research (LRCX) advanced 15.89 percent and 14.99 percent on the week.

Energy remained the best performing sector this year thanks to another big week for crude oil. SPDR Energy (XLE) climbed 4.97 percent as crude oil climbed 4.55 percent to $59.47 per barrel. Crude touched $60 on Friday. It has risen from $52 at the start of February.

The small busines confidence index fell to 95.0 in January, down from 95.9 in December. Analysts were looking for an increase, but lockdown policies in some states have kept uncertainty high for affected businesses.

Job openings held steady at 6.6 million in December. Economists predicted a small drop of 100,000 openings.

Headline consumer inflation increased 0.3 percent in January, while core prices were flat. Core inflation was in line with forecasts, but the consensus expected a 0.1 percent increase in core inflation.

Initial claims for unemployment held below 800,000, but only by 7,000 claims. Continuing jobless claims continued their decline, falling to 4.55 million in the week ended January 30, down from 4.69 million the week prior.

The University of Michigan’s advance reading of February consumer sentiment recorded a slight decline to 76.2 from 79 in January. Consumers concerns about the economy outweighed the prospect of stimulus. However, details of the stimulus bill only emerged this week and likely didn’t factor into the survey. Current plans would send $1400 checks per dependent, or $5,600 for a family of four, in addition to other measures. This would be a larger direct payment than in 2020 and that produced a large bump in economic growth and consumption for several months before trailing off as the year wore on.

The 10-year Treasury yield closed at 1.20 percent and near its high for the day. The move helped lift SPDR Financial (XLF) 2.01 percent. SPDR S&P Regional Banking (KRE) climbed 3.61 percent. Bonds headed in the other direction with iShares 20+ Year Treasury (TLT) sliding 0.63 percent on the week. iShares iBoxx High Yield Corporate Bond (HYG) gained 0.30 percent though, as credit risk keeps falling amid the strong and recovering economy.

Bumble (BMBL) had its debut on the Nasdaq this week, which included a surge of 63 percent on Thursday and then rising another 7 percent to close out its first trading week on Friday at $75.46.

Mohawk Industries (MHK) had a positive trading day with a significant increase of 5.99 percent in shares to $169.28 on Friday. It handily beat last quarter’s earnings projections and set a new company’s record for quarterly earnings. Net sales for the company were up over 9 percent on the quarter.

Even with the announcement of labor report numbers that fell below expectations, markets still saw gains on Friday. The latest monthly unemployment data reported showed a decrease in the U.S. unemployment rate from 6.7 to 6.3 percent as more Americans stopped looking for work. Discouraged workers are not counted as unemployed if they give up on finding a job. The U.S. economy created 49,000 net new jobs in January, almost hitting the consensus forecast of 50,000 jobs.
On Friday, the S&P 500 saw a 0.39 percent increase, the Dow increased by 0.30 percent, and the Nasdaq gained 0.57 percent on the day. These were record closing highs for the S&P 500 and the Nasdaq. The Dow followed and nearly reached its recent record-high. This past week marked the top-performance of weekly gains for the Dow, Nasdaq, and S&P 500 since November 2020, with the S&P 500 the weekly-gain frontrunner among the indexes at a 4.6 percent increase.
The Russell 2000 Index likewise closed the week with a 1.4 percent gain on the day for a record daily closing. This represented the small-cap index’s top daily gain since June of last year and reflects the expected relatively quicker trajectory of small-cap stocks within the context of the broader U.S. economic recovery.
For the week, the Russell 2000 Index gained 7.70 percent, the Nasdaq 6.01 percent, the S&P 500 Index 4.65 percent and the Dow Jones Industrial Average 3.89 percent.
GameStop Corp. (GME), at the center of the current short-squeeze phenomenon, continued to hold the attention of traders over another volatile week of trading activity. GameStop closed on Friday with a 19.20 percent gain. While its daily close is well below the $483.00 record-high from late January, it still reflects a massive price surge of 177 percent since the rally took off this year. Online trading platform Robinhood announced Friday that it will no longer restrict trading activity for the stock, which allowed for another round of stock purchases and prompted a 50-percent price surge at a point.
For the week, the energy sector stood out in the S&P 500 as a top performer. Crude oil prices, which had a 10-percent rise on the week. On Friday, Crude Oil (CL=F) was up 1.49 percent an increase to $57.07 a barrel. The $60 per barrel benchmark is being closely monitored as an indicator of a probable increase in production levels. SPDR Energy (XLE) advance 8.24 percent. First Trust ISE Revere Natural Gas (FCG) climbed 9.04 percent.
Gold (GC=F) prices also posted an increase on Friday of 1.34 percent, closing at a $24 increase on the day to $1,815.20 an ounce. After its notable upward trend catching attention earlier in the week, Silver (SI=F) prices continued to close Friday with a gain of 3.05 percent on the day of $0.80 an ounce to $27.03.
The 10-year Treasury bond yield increased 1.8 basis points on Friday for the day to 1.157 percent.
SPDR Financials (XLF) advanced 6.66 percent, SPDR Consumer Discretionary (XLY) 6.33 percent and SPDR Communication Services (XLC) 6.77 percent. Rising interest rates boosted financials with the 10-year yield closing at a new post-pandemic high. Strong earnings lifted consumer discretionary and communication services.
Investors mostly shrugged off a rebound in the dollar this week. The U.S. Dollar Index gained 0.45 percent, but iShares MSCI Emerging Markets (EEM) climbed 5.54 percent. The developed market iShares MSCI EAFE (EFA) did lag U.S. markets though, it managed only a 3.20 percent rise this week.
While employment has been slow to rebound in 2021, the manufacturing and service PMIs both were strong. The ISM manufacturing PMI came in at 58.7 percent, down from 60.7 percent in December, but still a very positive number. The services PMI was also 58.7 percent, up from 57.2 percent and ahead of the consensus that was looking for a drop amid coronavirus lockdowns.
Motor vehicle sales hit an annualized pace of 16.6 million in January, up from 16.3 million in December.
Earnings seasons continued its positive streak with Amazon (AMZN) crushing forecasts. Sales hit $125.56 billion; the first time Amazon crossed the $100 billion level. Earnings were $14.09 per share, nearly double the $7.23 consensus forecast. Along with Tesla, Amazon powered the consumer discretionary sector this week.
Alphabet (GOOGL) lifted the communication services sector after its shares spiked post-earnings. Google gained 14.37 percent on the week.
This week’s earnings beats have swung S&P 500 blended earnings growth to positive 1.7 percent, up 11 percentage points from where analysts forecast coming into 2021.

Equities shrugged off a rising dollar on Monday and rebounded from last week’s losses. Technology was the strongest sector, lifting the Nasdaq 2.55 percent. The Russell 2000 Index climbed 2.53 percent, the S&P 500 Index 1.61 percent and the Dow Jones Industrial Average 0.76 percent.

Shares of Tesla (TSLA) climbed 5.83 percent and Amazon (AMZN) 4.26 percent on Monday. That boosted SPDR Consumer Discretionary (XLY) 2.60 percent. SPDR Technology (XLK) rose 2.51 percent, SPDR Real Estate (XLRE) 2.26 percent and SPDR Communication Services (XLC) 1.87 percent.

Short-interest in GameStop (GME) reportedly fell on Monday and shares sank an even $100.00 or 30.77 percent. It’s unknown if the squeeze is over, but if it is, GME could fall another 90 percent or so, back to where it was trading before the squeeze began. Last week we sent out a sell alert on SPDR S&P Retail (XRT) because the largest holding in the fund is GameStop, a consequence solely of its incredible rally. Investors should stay away from that ETF until all the air comes out of GME.

The ISM Manufacturing PMI eased to 58.7 percent in January, down from 60.7 percent in December. Any reading above 50 signals expansion.  The ISM services PMI will be out midweek.

January’s employment report will be released on Friday. Economists project 105,000 new jobs, unemployment steady at 6.7 percent and 0.3 percent wage growth.

Big Tech and biotech will dominate a busy earnings week. Tuesday brings Amazon (AMZN), Google (GOOGL), Alibaba (BABA), Pfizer (PFE), Exxon Mobil (XOM), Amgen (AMGN), United Parcel Service (UPS) and ConocoPhillips (COP).

On Wednesday, we will receive reports from PayPal (PYPL), Qualcomm (QCOM), Biogen (BIIB), AbbVie (ABBV), Boston Scientific (BSX), eBay (EBAY) and Spotify (SPOT).

Nokia (NOK), Bristol-Myers Squibb (BMY), Merck (MRK), Ford (F) and Gilead Sciences (GILD) report on Thursday.

The week closes out with Regeneron (REGN), Illinois Tool Works (ITW) and Cardinal Health (CAH).