After a promising start to the week, stocks turned negative on mounting concerns about economic growth in Europe, with broad losses in energy, cyclicals, and technology.
Though bond yields backed off their highs and Secretary of the Treasury Janet Yellen and Fed Chair Jerome Powell both struck an optimistic tone on the economy, stocks posted back-to-back losses on Tuesday and Wednesday.
Thursday trading was emblematic of the week’s volatile action. The S&P 500 dropped nearly one percent earlier in the day following Powell’s comment about the Fed eventually rolling back its bond purchase program, then rallied to close with a 0.5% gain.4
Stocks rallied into the Friday close, pushing the Dow and S&P 500 into positive territory and paring the losses on the Nasdaq Composite.
Tech Remains Under Pressure
The losses in technology and other high-growth stocks in recent weeks have largely been attributed to the sharp and rapid rise in bond yields.
So, it was both interesting and a bit confounding that last week saw yields pull back, and rather than helping support these companies’ stock prices, many technology stocks continued to decline. The failure to rally on lower yields may be pointing to other reasons for their price weakness. Some are concerned about current prices, and believe there may be better growth opportunities in more fairly-valued companies. The “fear of missing out” that propelled investors to pile into these stocks over the last twelve months appears to have moderated.
This Week: Key Economic Data
Tuesday: Consumer Confidence.
Wednesday: ADP (Automated Data Processing) Employment Report.
Thursday: Jobless Claims. ISM (Institute for Supply Management) Manufacturing Index.
Friday: Employment Situation Report.
Source: Econoday, March 26, 2021 The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Lululemon Athletica (LULU), Chewy, Inc. (CHWY).
Wednesday: Micron Technology, Inc. (MU), Walgreens Boots Alliance (WBA).
Thursday: Carmax, Inc. (KMX).
Source: Zacks, March 26, 2021 Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Food For Thought
“Always it's spring and everyone's in love and flowers pick themselves.”
– E.E. Cummings
Reporting Cash Payments
Expecting a little extra cash from a gift, sale, or trade? The IRS wants to know. Individuals, corporations, and partnerships to report cash transactions of more than $10,000.
These cash payments can include jewelry sales, a gift from a family member, an overseas purchase, or any other cash transaction. You also need to report cash payments that were received in one lump sum, in two or more related payments within 24 hours, and as part of a single transaction or two or more transactions in the last year.
Luckily, reporting cash payments is simple. All you have to do is file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. The form requires information about both the giver and the receiver of the cash, a description of the transaction, and information about any other parties involved.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov5
Healthy Living Tip
The Health Benefits of a Meat-Free Day
There’s no denying the overwhelming health benefits of a plant-based diet. But going completely vegetarian or vegan isn’t realistic for everyone. Luckily, you can still enjoy the many health benefits by going “meat free” for just one day a week. Here are some of the main benefits of this healthy lifestyle swap:
You’ll be cutting out potentially dangerous processed meat – According to the World Health Organization, processed meats rank alongside cigarettes as a major cause of cancer.
- You’ll be decreasing your risk of heart disease – Coronary heart disease is linked to a meat-based diet, and the majority of cardiovascular diseases can be prevented by switching to a plant-based diet.
- You’ll be getting more vitamins, minerals, and fiber – When you don’t turn to meat on your meat-free day, you’ll likely turn to other foods such as veggies, fruits, whole grains, and other plant-based products. This variety helps you round out your diet!
These are just a few of the many benefits of going plant-free for a day. Want more inspiration? Just google “Meatless Monday” for recipe suggestions.
Tip adapted from MindFood.com6
Christine likes grapes but not potatoes. She likes squash but not lettuce, and peas but not onions. Following the same rule, will she like pumpkins or apples?
Last week’s riddle: I have no heart or mind, but I do have two legs. Yet they only touch the ground when I am not carrying things around. What am I? Answer: A wheelbarrow.
Photo of the Week
Golden Gate Bridge from Marshall Beach, San Francisco, California.