Since March of last year, the markets have been driven upward by investor optimism. Sometimes this mindset had been grounded in logic and statistics and sometimes it has appeared a bit too positive, given the chaos swirling around. This week has given us many tangible reasons to be optimistic about the markets as we move forward.
Vaccine Rollout – As the totals for administered vaccines continue to escalate, many companies are doing their part to accelerate the process even more rapidly. Kroger announced they are offering a one-time $100 payment to all employees who receive the vaccine. Additionally, Wynn Casinos opened a COVID testing lab, capable of processing between 5,000 and 7,000 tests per day. With so much to be gained from a return to normalcy, look for increasingly more companies to begin to incentivize vaccination compliance.
Refinance Numbers – After an extended period of historically low interest rates, home refinancing activity is still increasing at record rates. Last week, activity increased by 11.4%, the highest growth level in a year. With the average 30-Year mortgage rate sitting at 2.92%, Americans who are refinancing should serve as another tailwind for economic activity, as lower monthly payments will free up additional cash to be poured back into the economy.
Forward Guidance – As Q1 corporate earnings season nears completion, over 15% of S&P 500 companies have increased forward guidance for future quarters, the highest percentage in fifteen years. These projections are typically an accurate reflection of a company’s future growth potential. With over 60 of the largest companies in the world anticipating greater-than-expected growth, these projections are another optimistic “green flag” regarding future market behavior.
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Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.
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Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.
Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.