Succinct Summation of Week’s Events 3.12.21 (plus The Drivers of Deforestation)

The weekly summation is below, the main positive this week being 100 million vaccine doses administered (though at 67, I have not yet been able to get an appointment), and the main negative on the other side of the coin being the 535,000+ U.S.  deaths from COVID-19.  Market-wise, the main positive was the falling rate of jobless claims, the main negative the rising bond yields and subsequent inflation fears.  

“THE ULTIMATE BUY AND HOLD ON STEROIDS!”

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U.S. stocks close mixed as Dow notches fifth straight record high

It was another big day for the blue chips as rising bond yields once again sent investors fleeing from tech stocks and into the value sectors. Inflation worries took hold as the stimulus package is expected to grow the economy by nearly 9% this year and thus continue forcing interest rates up.  The 10-year note hit a one year high as did consumer sentiment. The Nasdaq fell once again, though still considerably above correction territory, and the Dow zoomed 293 points for its fifth consecutive record. Despite the tech exodus though, the Nasdaq registered 396 new highs vs only 12 new lows. Volume was considerably below average at 11.6 billion. 

S&P 500, Dow end at record highs after upbeat jobless claims data

For the second day, the market is absorbing the good news about inflation which shot all three indexes up again, boosted by the additional good news of a fall in jobless claims and the signing of the stimulus bill.  The Nasdaq had a particularly good day with the stalwarts Microsoft, Apple, Facebook, and Amazon recouping their losses from prior sessions and pulling back more again from correction territory.  In just a few days, the index has gone from 12% down from the February high to today just 5% down. The rotation continues. Value stocks which suffered during the pandemic are recovering their valuations while the tech stocks which benefitted from the pandemic are giving back part of theirs in a market where valuations in general are at an extreme. The Dow was up some 350 points around noon but settled at close 188 points up, the auction of 30-year Treasury bonds did nothing to stoke more inflation fears and the fall in jobless claims gave added optimism in strides toward a pre-pandemic life.  Volume remains below the 4-week average at just over 13 billion. 

Dow hits record in stock rally as inflation fears recede

Good reports concerning inflation removed a major fear factor from the market as 10-year Treasury notes rose less than feared as did consumer prices. This created a boom in the Dow shooting it up 464 points as the rotation from tech to value continued with the Nasdaq way up during the session due to the calming news on inflation but then coming down to close even. Equities continue to be helped by a surprisingly strong Q4 and recovery optimism. The retail traders continue to go gangbusters and are expected to benefit from the $1400 stimulus checks, much of which will likely be put into the market.  Volume was below the 4-week average at 13.8 billion. 

Nasdaq surges as tech stocks roar back

Whoa! The Dow was up some 350 points shortly after noon and then steadily declined throughout the afternoon session to close just about even. As I suspected yesterday, there was indeed a huge rally on the Nasdaq today as it regained 4% of its lost footing and is no longer in correction territory thanks to bond yields retreating and lots of bargain hunters scooping up beaten down tech stocks. So the rotation from tech to value took a breather today with funds going from value back to tech, but with the relief package due to pass any day now, the rotation back to value will undoubtedly be back. Volume was a little under the 4-week average at just under 14 billion. 

Nasdaq hits correction, Dow advances as stimulus bill nears finish line

The Nasdaq fell a little over 300 points and the Dow rose a little over 300 points as the migration from the tech pandemic stocks to recovery cyclical stocks continued in droves. The Nasdaq has now officially entered correction territory having today fallen 10.6% from the February high (but I suspect there’ll be another rally in tech tomorrow.)  There remain concerns over inflation with the stimulus bill and recovery but Yellen today asserted that the stimulus would fuel a very strong recovery without dangers of the economy running too hot.  High valuations have weighed heavily on the Nasdaq and rising bond yields have also contributed to the mass migration over to value. Volume was just over 14 billion.