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Hope you are all doing well. The S&P 500’s more than 1% gain for the week pushed the index above the 5,000-point threshold for the first time and marked its 14th positive result out of the past 15 weeks. The NASDAQ added more than 2% while the Dow posted a fractional gain. The 5,000-point mark the S&P 500 eclipsed on Friday is truly impressive when you consider the S&P first crossed 2,000 less than ten years ago in the summer of 2014. It’s Super Bowl Sunday and I have broken down this week’s update using some of the most popular prop bets for today’s game.

First Team to Call a Timeout

Strong earnings results from selected technology companies fueled another week of equity market style leadership for growth stocks relative to value stocks. Year to date, the total return for a U.S. large-cap growth benchmark was 8.8%. Good news for those of you on growth oriented investment like Vanguard Growth. It’s not just Growth stocks soaring. U.S. small-cap stocks posted a 2.4% gain for the week. I think small cap stocks are just starting their ascent while growth stocks probably call a timeout or pause from their meteoric rise first. Either way I continue to expect them both to perform well this year.

Coin Toss Winner

The coin toss winner is neither heads nor tails, it’s Bitcoin. Bitcoin climbed about 5% on Friday to cap a strong week in which the price of the most widely traded cryptocurrency rose 10%. Friday afternoon’s price of about $47,600 was the highest since Bitcoin briefly climbed to nearly $49,000 about a month earlier. The move in crypto shows investors are starting to feel more comfortable taking risk which is good for all riskier assets, which is part of the reason I think small cap stocks will continue to do well.

Fumble in the First Half

Look for bonds to continue their bumpy ride for the first half of this year, as the market resets their expectations of when the Fed will cut interest rates. The yield of the 10-year U.S. Treasury bond climbed on Thursday to 4.17% after a weekly report on unemployment claims underscored the recent strength of the U.S. labor market. New applications for jobless benefits fell to 218,000, marking the first decline in three weeks. At Friday’s close, the 10-year yield was 4.17%, up from 4.03% the previous week. I do expect that the Fed will cut rates in the second half of the year and look for yields to drop and bonds to rally later in the year.

Enjoy the game!

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