Capital Markets Weekly Update - Leumi USA

Capital Markets Weekly Update

Macro Commentary: 

By: Ariel Segal

CPI month over month was reported to be 0.3% on Wednesday, in line with expectations. Initial jobless claims were 793k, lower from the previous week (812k), but remains at an elevated level.

The European Commission cut the euro-area GDP growth forecast from 4.2% to 3.8% attributing the decrease to the vaccination rollout that has been less than smooth thus far. The 750 billion Euro recovery fund will provide a lift, especially for countries that rely on tourism.

Former President Trump was acquitted on Saturday, bringing his second impeachment trial to an end. Lawmakers will quickly turn their attentions back to the stimulus plan as certain benefits from the last relief package are set to expire on March 14th

Treasury Secretary Janet Yellen announced earlier this month that the Treasury will be reducing its cash position, which is currently sitting at a well above average level of about $1.6 trillion to about $500 billion by the end of June.

The daily number of new Covid-19 infections has hit its lowest point since late October. More than 176 million shots have been given worldwide with 54 million of those being given in the U.S.

Fixed Income Market:

By Joseph Colleran

The “reflation trade” continues in the fixed income credit markets as the week saw spread tightening across all sectors.  In corporate bonds the energy sector, driven by spiking oil prices, outperformed all others.   West Texas Intermediate (WTI) traded at $60/barrel this morning, marking the first time it has crossed this significant threshold since Nov 2018.   Meanwhile, HY bond yields are hovering at all-time low yields as investors remain comfortable with taking more risk to gain what little yield is available in the corporate market.  For perspective, the average YTM on an A rated corporate bond with a ten-year maturity is now just 1.80%.

   The past week saw relatively light retail demand for “vanilla” corporates; however, we continue to see strong interest in Structured Notes.  Some of this can be attributed to the President’s Day holiday but a larger influence seems to be the low absolute yields we touched on above.

Lipper Fund flow data for the week showed:    

      Domestic Equity Funds       down   $3.0BLN

      IG Bond Funds                     up       $2.7 BLN

      HY Bond Funds                   down    $0.2 BLN 

      Municipal Bond Funds         up $2.3 BLN       

Prior Week:

     Domestic Equity Funds      down    $3.0 BLN

      IG Bond Funds                    up        $6.1 BLN

      HY Bond Funds                   up        $1.3 BLN 

      Municipal Bond Funds      up         $1.2 BLN

U.S Equities:

By: James Zurovchak

After the prior week’s surge equity markets consolidated most of the week before finishing up with all three major indices setting record closing highs.  NASDAQ and S&P 500 were up 1.7% and 1.3% respectively and DJI gained 1.1%.  8 of 11 GICS sectors were up with Technology (+8.2%) and Energy (+5.0%) outperforming.  Utilities (-1.5%), Consumer Discretionary (-1.1%) and Consumer Staples (-0.1%) were the losers on the week.  Value outperformed Growth +1.9% vs 1.3%.  Small Caps again outpaced the majors posting a gain of 2.5%.  Continued recovery and Fed Policy are the drivers that continue to push the market higher.  These were reinforced last week with most of the S&P 500 completing earnings reporting showing slightly higher year-over-year gains (a remarkable feat) and Chairman Powell continuing to pledge near zero rates and continued asset purchases. 

Foreign Exchange:

By Anthony Minardo

The US dollar spent most of last week giving back the gains of the previous week, the dollar has weakened slightly vs most G10 currencies. The US stock markets reaching new all-time highs spurred the US dollar selling. Continued progress with the distribution and production with vaccines across the US (albeit slower than most had hoped) has been one catalyst for the move higher in stocks. More sideways trading of the dollar within its current ranges continues to be our thoughts moving forward.  

Financial Planning:

By Brian Stigliano 

Important Income Tax Deadlines for 2020 Tax Year 

March 15, 2021

  • Deadline for partnerships and S corporations to file 2020 returns or request automatic 6-month extension.  
  • Deadline to elect to be treated as an S corporation for 2020.  

April 15, 2021

  • Deadline for individuals and corporations to file 2020 returns or request automatic 6-month extension.
  • Deadline for contributions to Traditional IRA, Roth IRA, Health Savings Account (HSA), SEP IRA, or solo 401(k) for 2020 tax year.
  • Deadline to file 2020 gift tax returns.

June 15, 2021

  • Deadline for US citizens living abroad to file 2020 individual tax returns or request automatic 4-month extension.  

September 15, 2021

  • Deadline for partnerships and S corporations to file 2020 returns if extension was requested.

October 1, 2021

  • Deadline for self-employed persons or small employers to establish a SIMPLE IRA.

October 15, 2021

  • Deadline for individuals and corporations to file 2020 returns if extension was requested.
  • Deadline to fund a SEP IRA or solo 401(k) for tax year 2020 if extension was requested.

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IMPORTANT DISCLOSURES
The opinions voiced in this material, including without limitation the statistic information herein, are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. The economic or market analyses or forecasts in this material reflect the views of the individuals who prepared them and do not necessarily represent the position of Bank Leumi USA, Leumi Investment Services Inc. or of other units of the worldwide Leumi Group. The analyses and forecasts should not be construed as a recommendation to buy or sell, or the solicitation of an offer to buy or sell any securities, currencies, or financial instruments.

Bank Leumi USA, other units of the Leumi Group, or the individuals that prepared the analyses or forecasts may have positions in securities, currencies, or financial instruments that may be affected by action that is consistent with the analyses or forecasts. Any economic forecasts set forth in the presentation may not develop as predicted. The material is based in part on information from third-party sources that we believe to be reliable but which have not been independently verified by us, and for this reason we do not represent that the information is accurate or complete, and no liability is assumed for any direct or consequential losses arising from their use. Except where otherwise indicated herein, the information in this material is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available.

Investing involves risk. Past performance is not a guarantee or a reliable indicator of future results. You should obtain relevant and specific professional advice before making any investment decision. All investors must carefully consider the risks, charges, fees, and expenses, review the prospectus or other offering information if applicable, and consider their personal financial situation and tolerance for risk before making any investment.

Bank Leumi USA is an FDIC Insured, New York State chartered bank. In the U.S., banking products and services are provided through Bank Leumi USA and brokerage products and services are provided by Leumi Investment Services Inc. Leumi Investment Services Inc. is a member of FINRA (www.finra.org) and SIPC (www.sipc.org), and is a wholly-owned subsidiary of Bank Leumi USA.  Certain products and services are not available to U.S. residents and/or are offered through third party providers.

Non-deposit investment products offered through Bank Leumi USA and Leumi Investment Services Inc. are:

•             Not insured by the FDIC or any other federal or government entity

•             Not guaranteed by Bank Leumi USA, Bank Leumi le-Israel, B.M., or any other bank

•             Subject to investment risks, including possible loss of the principal amount invested

© 2021 Bank Leumi USA. Leumi, Leumi Investment Services Inc., and Bank Leumi USA are registered trademarks of Bank Leumi USA. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted. This material has not been reviewed by any regulatory authorities.

Ariel Segal | Treasury Analyst
350 Madison Avenue, 4th floor | New York, NY 10017
Tel: 212.626.1199 | ariel.segal@leumiusa.com  

IMPORTANT DISCLOSURES

The opinions voiced in this material, including without limitation the statistic information herein, are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. The economic or market analyses or forecasts in this material reflect the views of the individuals who prepared them and do not necessarily represent the position of Bank Leumi USA, Leumi Investment Services Inc. or of other units of the worldwide Leumi Group. The analyses and forecasts should not be construed as a recommendation to buy or sell, or the solicitation of an offer to buy or sell any securities, currencies, or financial instruments.

Bank Leumi USA, other units of the Leumi Group, or the individuals that prepared the analyses or forecasts may have positions in securities, currencies, or financial instruments that may be affected by action that is consistent with the analyses or forecasts. Any economic forecasts set forth in the presentation may not develop as predicted. The material is based in part on information from third-party sources that we believe to be reliable but which have not been independently verified by us, and for this reason we do not represent that the information is accurate or complete, and no liability is assumed for any direct or consequential losses arising from their use. Except where otherwise indicated herein, the information in this material is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available.

Investing involves risk. Past performance is not a guarantee or a reliable indicator of future results. You should obtain relevant and specific professional advice before making any investment decision. All investors must carefully consider the risks, charges, fees, and expenses, review the prospectus or other offering information if applicable, and consider their personal financial situation and tolerance for risk before making any investment.

Bank Leumi USA is an FDIC Insured, New York State chartered bank. In the U.S., banking products and services are provided through Bank Leumi USA and brokerage products and services are provided by Leumi Investment Services Inc. Leumi Investment Services Inc. is a member of FINRA (www.finra.org) and SIPC (www.sipc.org), and is a wholly-owned subsidiary of Bank Leumi USA. Certain products and services are not available to U.S. residents and/or are offered through third party providers.

Non-deposit investment products offered through Bank Leumi USA and Leumi Investment Services Inc. are:

• Not insured by the FDIC or any other federal or government entity

• Not guaranteed by Bank Leumi USA, Bank Leumi le-Israel, B.M., or any other bank

• Subject to investment risks, including possible loss of the principal amount invested

© 2019 Bank Leumi USA. Leumi, Leumi Investment Services Inc., and Bank Leumi USA are registered trademarks of Bank Leumi USA. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted. This material has not been reviewed by any regulatory authorities.

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