Market Moment
Glen Eagle®: America’s Women-Owned Trading Desk®
03/01/2021
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Everyone Wants Equities: As treasury yields rose over the past month (with the 10-year treasury yield reaching a 12-month high) the stock market fell as the high valuations of various companies, such as those in the technology sector, were questioned in this new higher-rate environment. Despite this headwind investors used the dip as an opportunity to add to their equity positions. In February alone equity ETFs saw inflows of $80 billion which is 4x the 12-month average.
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Looking at Liquidity: Data shows that American households have increased their cash savings and liquid assets significantly during the quarantine. However, the Federal Reserve estimates that 28% of the increase in liquid assets went to the top 1% of Americans and 70% went to those in the top quintile. It seems wealthier American’s have a lower propensity to spend than those in lowest income brackets. One takeaway is that fears of an economy overheating could be overstated.
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US Dividends Didn’t Disappoint: Last year global dividends dropped 12% from 2019 levels as the coronavirus pandemic raged. Despite this reality, the US market performed better as dividend payment rose 2.4% year-over-year. This was due in part to the fact that American companies were more likely to cut back on their share buyback programs (S&P500 index stock buybacks dropped 30%) rather than on dividends. European companies, by contrast, don’t focus as heavily on buyback programs so they are forced to lower their dividends more aggressively.
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Hedge Funds Adapt: As retail traders from social media platforms have caused stocks like GameStop to rise rapidly (at the expense of institutional short positions), hedge funds have adjusted their tactics. Those adjustment include using total return swaps (to avoid publicly disclosing their short positions) and shorting ETFs (rather than individual stocks), to diversify their risk. These actions have led the short interest, relative to the shares available to trade for stocks in the Russell 3000, to drop by around 2% over the past month.
Economic Calendar
Monday: Markit Manufacturing PMI (Feb), ISM Manufacturing index (Feb), Construction spending (Jan)
Tuesday: Motor vehicle sales (Feb)
Wednesday: ADP Employment report (Feb), Markit Services PMI (Feb), ISM Services PMI (Feb)
Thursday: Jobless claims (Feb), Factory orders (Jan)
Friday: Non-farm payrolls (Feb), Unemployment rate (Feb), Trade deficit (Jan), Consumer credit (Jan)
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US Futures
S&P 3853 +1.15%
DOW 31,232 +1.04%
NASDAQ 13,112 +1.56%
World Markets
FTSE 6581.03 +1.6%
NIKKEI 29,663.5 +2.41%
Hang Seng 29,452.57
+1.63%
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Treasuries
3 Mo 0.04%
10YR 1.46%
30 YR 2.17%
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Currencies
Euro $1.204
Pound $1.395
Yen $106.697
Commodities
Gold 1744.4 +0.09%
WTI Crude 62.29 +1.28%
Silver 26.93
+1.87%
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Upcoming Earnings Calls
Monday - ZM, WKHS, NVAX, CLOV, NIO
Tuesday - KSS, TGT, JWN, BOX
Wednesday - DLTR, SNOW, VRM, SPLK
Thursday - KR, AVGO, SDC, COST, GPS
Friday - N/A
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Consider working with Glen Eagle as one of your preferred partner trading desks
Client Focused Trading for large institutions, pensions, hedge funds, wealthy families, and private equity for over 30 years
Ansie Monaghan
Carol Ann Fernandez
Glen Eagle
4422C Route 27
PO Box 399
Kingston, NJ 08528
(609) 631-8231
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