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Hope all is well. The NASDAQ again underperformed the other major equity indexes by a wide margin, and at one point on Friday, it was 10% below the record high it had set three weeks earlier, briefly putting it in a correction. The NASDAQ’s relatively high weighting in tech stocks has hurt the index’s recent results. The S&P 500 and the Dow rose sharply on Monday, tumbled on Thursday, and fell on Friday morning before staging an afternoon rally, leading to modest overall weekly gains for both indexes. The volatility was in part a side effect of a sharp rise in yields of government bonds. Government bond prices were under pressure again, as the yield of the 10-year U.S. Treasury bond soared above 1.60% at one point on Friday, the highest in 13 months.  I have broken down this week’s news using quotes from legendary comedians.


“The trouble with unemployment is that the minute you wake up in the morning you’re on the job” – Slappy White

People are getting back to work and off of unemployment. The U.S. economy generated 379,000 jobs in February, more than double the amount that most economists had expected. The bulk of the job growth came in leisure and hospitality, where hiring picked up in a segment of the economy that’s been hit hard by the pandemic.


“If you can see the handwriting on the wall… you’re on the toilet.” -Redd Foxx

The market is trying to see the handwriting on the wall when it comes to Fed policy.  Comments on Thursday from U.S. Federal Reserve Chair Jerome Powell triggered at least some of a steep market decline that afternoon. Powell suggested that inflation is likely to pick up in the coming months.  Markets took that as a sign the Fed might raise rates sooner than expected. While ignoring that Chair Powell also said that it would likely prove temporary—and not enough for the Fed to alter its current policy of maintaining ultralow interest rates.


“Just cause you got the monkey off your back doesn’t mean the circus has left town.” -George Carlin

Corporate earnings got the monkey off it’s back and finally turned positive year over year, though we are nowhere near being back to normal.  S&P 500 recorded an average earnings gain of 3.9% over the same quarter a year earlier. The index is now reporting year-over-year growth in earnings in Q4 2020 for the first time since Q4 2019. Analysts expect double-digit earnings growth for all four quarters of 2021 but that will largely depend on how quickly cities like New York are able to fully reopen.

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