Market Perspective for March 1, 2021

Monday saw an increase in tech stocks, which help fueled gains across the major indexes. This helped move the Nasdaq off of its 4.9 percent drop over the past week. The Russell 2000 Index gained 3.37 percent on Monday, the Nasdaq 3.01 percent, the S&P 500 Index 2.38 percent, and the Dow Jones Industrial Average 1.95 percent.

SPDR Technology (XLK) climbed 3.22 percent on the day as it started reversing last week’s losses. One of the frontrunners in technology was Zoom Communications (ZM). Its shares increased 9.65 percent to close at $409.66. This daily gain largely dispelled concerns over the resumption of in-person activities and the potential for reduced demand going forward for the company’s video conferencing platform, primarily for work activities.

Apple Inc. (AAPL) shares shot up 5.39 on Monday to close at $127.79. Netflix (NFLX) ended the day with a 2.19 percent increase to close at $550.64.

In what was notably the best trading day for the S&P 500 since last June, the index surged 2.38 percent. Its spike was aided by the stabilization and improved performance since last week by financials, IT, and industrials. SPDR Financial (XLF) expanded 3.13 percent with interest rates moving higher once again.

SPDR Energy (XLE) returned 2.60 percent with traders shrugging off a drop in crude oil. West Texas Intermediate briefly fell below $60 before closing at $60.64 per barrel. Data showed China’s economic growth could be slowing. Analysts believe the country has filled its strategic reserve as well.

The U.S. Dollar Index rose 0.09 percent on the day. Even with the slight advance for the dollar, iShares MSCI Emerging Markets (EEM) managed an increase of 2.68 percent for Monday.

Johnson & Johnson (JNJ) shares saw a bump for the day to close 0.54 percent up, after temporarily surging to 2 percent during the day. The U.S. Food and Drug Administration’s authorization for emergency use of the company’s coronavirus vaccine drove the rally, which Johnson & Johnson says that it will have 20 million doses distributed by month’s end.

Boeing Co. shares gained 5.84 percent upon United Airlines’ (UAL) commitment to purchase an additional 25 of its 737 Max models for its travel recovery plan over the next few years. United Airlines saw shares rise 1.2 percent on the day as well.

Progress on the latest $1.9 trillion coronavirus stimulus legislative proposal through the past week also fueled the rally. The proposal, having passed the House, must now be approved in the Senate, which is being urgently pressed by the bill’s supporters within the next two weeks to beat out the expiration of federal jobless benefits.

Gold prices dropped 0.4 percent or $11.30 on the day to close at $1713.50 per ounce. Silver prices were similarly down for the day on Monday with a loss of $0.34 an ounce to close at $26.18.

Monday brought positive news on manufacturing data. The Institute for Supply Management’s (ISM) manufacturing shows an increase for February well above the consensus projection of 58.9 to 60.8, which was up from 58.7 from the month before. This marked the biggest surge in the index’s domestic manufacturing levels over the past three years, as made possible in part from the recent rise in raw material prices.

The growth in the U.S. contrasted with a slowing Chinese PMI. China’s manufacturing PMI slowed, and the services PMI dropped sharply. Although well off its lows from last year, China’s service PMI slowed to levels seen only during the pandemic and the 2008 financial crisis.

Construction spending levels also increased 1.7 percent on the month for January. The Commerce Department’s January report was more than double the increase of 0.8 percent per the consensus expectation. An increase in January of 3.8 percent for residential construction spending helped drive this monthly climb for the industry.

This week, the Fed will publish its updated report on its analysis of the U.S. economy in its Beige Book released this Wednesday. On Thursday, monthly data on domestic factory purchase orders, first-time unemployment claims, and durable goods will be published.

To wrap up the week, the U.S. unemployment numbers will be released. Economists project 218,000 net new jobs, a 6.3 percent unemployment rate (unchanged from the month prior), and a 0.2 percent increase in wages.

Retail earnings season heats up this week with reports from Target (TGT), AutoZone (AZO), Kohls (KSS), Ross Stores (ROST), Nordstrom (JWN), Urban Outfitters (URBN), Abercrombie & Fitch (ANF), Dollar Tree (DLTR), America Eagle (AEO), Costco (COST), Kroger (KR), The Gap (GPS) and Big Lots (BIG).

Other firms reporting this week include Marvell Technology (MRVL), Broadcom (AVGO), Guidewire (GWRE), Okta (OKTA), Wendy’s (WEN), AMC Entertainment Holdings (AMC), Hewlett Packard Enterprise (HPE), and Overseas Shipholding Group (OSG).

    Your Cart
    Your cart is emptyReturn to Shop