General Market Commentary as of March 31, 2021
The start to 2021 picked up where it left off in 2020 as the stock market continued to surge and reach new milestones. The S&P 500 finished the quarter up 5.77%, the Dow Jones Industrial Average was up 7.76%, and the Nasdaq Composite finished up 2.78%. Value stocks continued to gain ground versus the previously dominant growth stocks. Both U.S. Small Cap and U.S. Mid Cap outperformed U.S. Large Cap. March was the fourth straight month the yield on the 10-year U.S. Treasury increased and on March 31, 2021 stood at 1.74%.
According to the Institute for Supply Management (ISM), manufacturing activity in March posted its largest increase since 1983. Housing prices continue to appreciate as the real estate market is being fueled by low inventory, strong demand, and low mortgage rates. Oil prices continued to rally in the quarter as economic activity and global travel picked up. Energy and financials were the strongest performing S&P 500 sectors to begin the new year, while consumer staples and information technology were detractors.
The effectiveness of the vaccine rollouts will help determine the extent of the economic momentum moving forward. Monetary support and the reopening of the economy have helped propel U.S. growth. In March, U.S. employers added 916,000 new jobs and the unemployment rate dipped from 6.2% to 6.0%. The American Rescue Plan added $1.9 trillion bringing the fiscal support total in excess of $5 trillion. The inflationary impact of these policies is leading to skepticism of whether the Fed can maintain its accommodative plans. Fed Chair Powell has committed to maintain the Fed’s policy of near zero interest rates until the economy exceeds his employment and inflationary targets.
Market Recap
| Tot Return | 3-MO* | 12-MO* | 3-Year* | 5-Year* | Closing Value |
|---|---|---|---|---|---|
| S&P 500 | 5.77% | 53.71% | 14.58% | 14.04% | 3,972.89 |
| Dow Jones Industrial Average | 7.76% | 50.48% | 11.02% | 13.27% | 32,981.55 |
| NASDAQ Composite | 2.78% | 72.04% | 23.31% | 22.16% | 13,246.87 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.
