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
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
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.
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.
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.
Last Week's Econimc Data 2/16
|Last Week's Economic Data||Actual||Survey|
|Wholesale Inventories MoM||0.3%||0.1%|
|Initial Jobless Claims||793k||755k|
This Week's Econimc Data 2/16
|This Week's Economic Data||Release Date||Survey|
|PPI Final Demand Mom||2/17/21||0.4%|
|Retail Sales Advance MoM||2/17/21||1%|
|Initial Jobless Claims||2/18/21||773k|
|Existing Home Sales||2/19/21||6.60m|
|Source: Bloomberg L.P.|
Market Data Values 2/16
|Interest Rates||Current||WoW||MoM||YoY||US Swap Spreads||Current||WoW||MoM||YoY|
|1 Month Libor||0.11%||(0.8 bp)||(2.1 bp)||(155.0 bp)||12-Month||+12 bp||+0.0 bp||+1.7 bp||+0.4 bp|
|3 Month Libor||0.19%||(1.4 bp)||(3.5 bp)||(150.3 bp)||2-Year||+9 bp||+0.5 bp||+2.1 bp||+5.8 bp|
|6 Month Libor||0.20%||(0.5 bp)||(4.6 bp)||(150.7 bp)||3-Year||+10 bp||(0.2 bp)||+3.3 bp||+7.7 bp|
|12 Month Libor||0.30%||(0.3 bp)||(2.0 bp)||(149.6 bp)||5-Year||+13 bp||+0.8 bp||+4.9 bp||+12.7 bp|
|Fed Funds Effective||0.08%||(1.0 bp)||(150.0 bp)||7-Year||+10 bp||+1.6 bp||+7.5 bp||+15.0 bp|
|SOFR||0.05%||+0.0 bp||(3.0 bp)||(152.0 bp)||10-Year||+9 bp||+14.0 bp||+29.5 bp||+115.1 bp|
|US Treasury Yields||Current||WoW||MoM||YoY||30-Year||(19 bp)||+14.2 bp||+32.3 bp||+148.6 bp|
|12-Month||0.07%||(2.5 bp)||(140.3 bp)||Equity Markets||Current||WoW||MoM||YoY|
|2-Year||0.12%||+0.4 bp||(1.4 bp)||(130.9 bp)||Dow Jones||31,528||+0.2%||+2.3%||+7.2%|
|3-Year||0.22%||+3.3 bp||+1.6 bp||(117.7 bp)||S&P 500||3,936||+0.0%||+4.4%||+16.4%|
|5-Year||0.55%||+7.7 bp||+10.1 bp||(86.5 bp)||NASDAQ||14,041||(0.4 %)||+8.0%||+44.3%|
|7-Year||0.92%||+10.0 bp||+15.1 bp||(58.7 bp)||Currencies||Current||WoW||MoM||YoY|
|10-Year||1.29%||+0.4 bp||(1.4 bp)||(130.9 bp)||Euro||1.2114||(0.0 %)||+0.3%||+11.8%|
|30-Year||2.08%||+0.4 bp||(1.4 bp)||(130.9 bp)||Japanese Yen||105.8800||(1.2 %)||(2.1 %)||+3.8%|
|US Swap Rates vs 3ML||Current||WoW||MoM||YoY||British Pound||1.3917||+0.7%||+2.4%||+7.0%|
|12-Month||0.19%||+0.0 bp||(0.9 bp)||(139.9 bp)||Canadian Dollar||1.2684||+0.1%||+0.6%||+4.3%|
|2-Year||0.21%||+0.9 bp||+0.7 bp||(125.1 bp)||Australian Dollar||0.7763||+0.3%||+1.1%||+15.6%|
|3-Year||0.32%||+3.1 bp||+4.9 bp||(110.0 bp)||Swiss Franc||0.8920||+0.0%||(0.1 %)||+10.0%|
|5-Year||0.68%||+8.5 bp||+15.0 bp||(73.7 bp)||Israeli Shekel||3.2417||+0.3%||(0.3 %)||+5.5%|
|7-Year||1.02%||+11.6 bp||+22.6 bp||(43.8 bp)||Bitcoin||48,660||+2.8%||+34.3%||+404.4%|
|10-Year||1.38%||+14.4 bp||+28.1 bp||(15.8 bp)||Commodities||Current||WoW||MoM||YoY|
|30-Year||1.89%||+14.6 bp||+30.9 bp||+17.7 bp||Gold||1,797||(2.3 %)||(1.7 %)||+13.4%|
|Source: Bloomberg L.P.||Crude Oil||60||+3.4%||+14.5%||+15.1%|
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