Market Perspective for April 27, 2021

The week started with record gains for the S&P 500 as stocks traded higher. The S&P 500 gained 0.18 percent on Monday, while the Nasdaq closed up 0.87 percent. Indicating a strong performance day for small-cap stocks, the Russell 2000 Index increased 1.15 percent on the day. The Dow Jones Industrial Average lost 0.18 percent.

Inflation trades dominated the day. SPDR Energy (XLE) increased 0.67 percent, SPDR Materials (XLB) 0.59 percent and SPDR Technology (XLK) 0.51 percent. Lumber gained another 3.50 percent on Monday, lifting the 1-year return to 335 percent. Copper broke out to a new 52-week high and is approaching its all-time high set in 2011. It has risen 90 percent in the past year.

Economic data out on Monday showed that durable goods orders fell well behind the expected 2.3 percent increase over the month with a 0.5 percent increase. With transportation excluded, the durable goods orders increased by 1.6 percent.

For the Dow, Procter & Gamble (PG) stock dropped majorly by 2.02 percent on the day, and Coca-Cola (KO) stock likewise fell by 1.46 percent on Monday, which dragged the index down overall. American Express (AXP) shares saw a 4.2 percent increase.

Spotify (SPOT) was a major winner on Monday with a gain of 4.9 percent on the heels of news that a subscription price increase for the audio-streaming service is on the horizon.

Microsoft Corporation (MSFT) shares gained 0.15 percent on the day, Facebook (FB) shares 0.63 percent and Amazon (AMZN) 2.04 percent. Alphabet Inc. (GOOG), likewise rose 0.43 percent on the day, while Netflix (NFLX) shares gained 0.94 percent.

On Monday, the 10-year Treasury note yield closed around 1.57 percent, with an increase of 0.3 basis points for the day.

On Monday, crude oil futures (CL=F) had a slight dip of 0.32 percent, down to $61.94 a barrel. However, the Energy Select Sector SPDR Fund (XLE) increased 0.67 percent on the day.

Gold futures (GC=F) increased 0.16 percent to $1,780.60 per ounce on Monday.

For the coming week, the Federal Reserve meets next on Wednesday, at which time Chairman Jerome Powell is expected to confirm the Fed’s plans to stay the course in terms of delaying any potential increase in interest rates. The target inflation rate for the Fed remains at 2 percent so far pending any unexpected announcements of a policy change.

On Wednesday, President Biden is planned to speak to Congress regarding the administration’s substantial infrastructure spending plan as well as proposed tax reforms, including a potential increase on the capital gains tax to 39.6 percent for those individuals earning at least $1 million per year and a reversion of the corporate tax rate to 28 percent from the current 20 percent.

The initial estimate of first quarter GDP will come on Thursday. The consensus is looking for 6.5 percent growth.

Investors are awaiting first quarter earnings results for major tech companies this week. Since the start of this earnings reporting season, about 84 percent of reporting companies have posted positive growth for the first quarter.

Tesla (TSLA) kicked off a heavy earnings week with an earnings beat, but shares fell around 2 percent in after-hours trading because all its profit came from selling regulatory credits

Tuesday brings results from Microsoft (MSFT), Alphabet (GOOGL), Advanced Micro Devices (AMD), Visa (V), Pinterest (PINS), Texas Instruments (TXN), General Electric (GE), Amgen (AMGN), Raytheon (RTX), Starbucks (SBUX), Eli Lilly (LLY), United Parcel Service (UPS) and 3M (MMM).

On Wednesday, we’ll hear from Apple (AAPL), Facebook (FB), Boeing (BA), Shopify (SHOP), Qualcomm (QCOM), Spotify (SPOT), Ford (F), Align Technology (ALGN) and Boson Scientific (BSX).

Amazon (AMZN), Microvision (MVIS), Bristol-Myers Squibb (BMY), Mastercard (MA), Twitter (TWTR), Caterpillar (CAT), Comcast (CMCSA), Merck (MRK) and McDonald’s (MCD) headline Thursday’s reports.

Oil giants Exxon (XOM) and Chevron (CVX) close out the week along with Abbvie (ABBV), Clorox (CLX), Colgate-Palmolive (CL) and Illinois Tool Works (ITW).

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