- Major indexes closed higher for the holiday-shortened trading week…market sentiment appeared to largely be driven by the $2.25 Trillion infrastructure plan unveiled on Wednesday…this bill would vastly increase spending on internet and transportation infrastructure, as well as research and development…Corp Taxes in this bill plan go rise to 28% from 21% so we will see markets begin to price in higher capital gains, and dividend taxes as well…with low interest rates and the search for yields, markets are aggressively taking on more risk in the never ending search for returns…this in turn drives up market risk and downside exposure when the unexpected occurs…Surprisingly we did see the DOW outperform NASDAQ by the widest range since 2006…
- The Consumer Confidence Index had registered its biggest gain in nearly 18 years in March, while its gauge of consumer expectations had reached its best level since the summer of 2019. Regional manufacturing indexes also surprised strongly on the upside, while the Institute for Supply Management’s gauge of factory activity hit its highest level since December 1983… On Thursday, the Labor Department announced that weekly jobless claims had increased to 719,000, from a downwardly revised (and pandemic-era low) of 658,000 the week before…and finally on Friday, we see that over 916K new jobs were created in March while the unemployment rate fell to 6% and auto sales rose 11% overall…
- The jobless claims data seemed to drive a decline in the yield on the benchmark 10-year U.S. Treasury note at the end of the trading week, but they quickly rose on Friday’s new jobs numbers…and we did see the highest amount of junk debt rated companies sold in Q1 ever; -to the tune of $157 Billion
- European shares rose to near record highs in a shortened trading week on optimism about a speedy economic recovery. Expectations for U.S. infrastructure spending helped alleviated concerns of a longer-than-anticipated lockdown on the Continent…Inflation in the 19 countries of the eurozone quickened in March to 1.3% from 0.9% in February on higher energy and non-processed food prices, according to an official flash estimate. The European Central Bank has said there would be a temporary spike in inflation, which will then slow to well below the 2% target in the years ahead.
- Chinese equities were strong ahead of a long weekend, with sentiment buoyed by the news of an additional tax reduction to consolidate the economic recovery, strong March purchasing manager’s index data, and the better tone of U.S. and global markets…and finally, China’s official PMIs for manufacturing and services published by the National Bureau of Statistics (NBS) were better than expected in March expanding above the 50 mark to show economic expansion.
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