The S&P 500 was down slightly on the week as sector dispersion was again a major factor. Materials were up more than 4% while both energy and financials gained. The NASDAQ was down 3.3% as technology bellwethers were sold aggressively following good earnings.
There was another drop in existing home sales this week. Only 6.01 million homes were sold in March, down from February’s 6.24 million. This is the second consecutive month we have seen a drop.
The S&P 500 pushed higher despite some softness mid-week. Upside was achieved by the more defensive sectors as growth and small caps struggled to gain traction. The S&P 500 ended the week up 1.2%, but small cap stocks finished in the red.
Earnings season has begun with strong expectations for the first quarter. Stimulus payments in March are expected to positively impact company earnings. The current forecast is for earnings per share to grow by 29.25%.
Equities advanced last week over the shortened holiday week. The S&P 500 was up 2.7%, led by a rebound in the Technology sector. The NASDAQ was up 3.4% and took its cue from a decline in Treasury yields.
There was a significant drop in personal income in February; it decreased by 7.1% over the month. This is after January saw an increase of 10.1%. The main contributing factor to the decrease was that there were no stimulus checks sent out in February.
Equities came under pressure this week as the anticipated stimulus pop failed to materialize. The S&P 500 was down 2.1% on the week, but there was significant dispersion with many popular stocks down much more.
A big economic number this week was the Retail Sales report for February. The decline of 3% comes after a strong January number of 7.6%. The decline, which was larger than expected, could be a function of more moderate sales after January’s bump from the second round of stimulus checks.
Equities bounced back this week with the S&P 500 advancing 2.1%. Focus continues to be on the outperformance of stocks with lower valuations. The NASDAQ continues to underperform amid big swings in intra-day volatility.
Orders for durable goods in January, a leading economic indicator, were up by 3.4%. This is the ninth month in a row the index is up. The increase was led by transportation orders, up eight of the last nine months.