By: Mike Horwath, CFA®

  • Stocks were mostly flat last week. We saw global markets (represented by the MSCI All Country World Index) down -0.2% and domestic stocks (represented by the S&P 500 Index) up 0.04%.
  • For the month of April, domestic large-cap stocks led the way with a 5.3% return. Below are index returns for April this year, and for over the last one-year period:
*as of 4/30/2021AprilYTD1 Yr
MSCI All Country World Index (Global Stocks)4.4%9.1%45.8%
S&P 500 Index (U.S. Large Companies)5.3%11.8%46.0%
Russell 2000 Index (U.S. Small Companies)2.1%15.1%74.9%
MSCI EAFE (International Developed Stocks)3.0%6.6%39.9%
MSCI Emerging Markets (International Emerging Stocks)2.5%4.8%48.7%
Barclays U.S. Aggregate Bond Index0.8%-2.6%-0.3%
Barclays Municipal Bond Index0.8%0.5%7.8%
  • May flowers came early this year in the stock market, with April being a strong month across the board. For the month, all domestic equity sectors were positive.
  • The big news last week was the estimate of Q1 2021 GDP. It was announced by the Commerce Department that the U.S. economy grew by an annualized 6.4% for the quarter, which is the third straight quarter of robust growth. The economy is nearly back to its size prior to the pandemic, largely thanks to an increase in government spend.
  • Based on the companies that have reported earnings so far, 87% of them are beating analyst estimates. A recovery in corporate earnings throughout 2021 is key for stocks to maintain (and possibly increase) their lofty valuations.
  • The Federal Reserve completed another two-day meeting last week and were consistent in their messaging. They have committed to keeping rates low and attribute any inflation increases to short-term pressures.
  • The labor market continues its path to recovery. For the third week in a row, initial jobless claims fell below 600,000. While it still sounds like a lot, that number is as low as it has been since early 2020. Investors will be looking at the monthly jobs report on Friday this week which will highlight whether the economy added jobs and give details on current unemployment.
  • I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.

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