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3 Keys to the Week - March 5, 2021

This week was a tale of two market sentiments. The big negative news was the technology stocks have entered into “correction” range on the fears of future interest rate increases. While this negative performance cast a gloomy shadow over Wall Street, there was still favorable data pointing to economic progress moving forward.

Tech Correction – The Nasdaq 100, the 100 largest non-financials in the Nasdaq Index, is more than 10% off historic highs, with many big names down closer to 20% from all-time highs. Technology stocks have been hit particularly hard, as investors fear many increasing hikes in interest rates. Since most technology stocks have rapid growth assumptions built into their current valuations (usually larger assumptions than most other sectors), a more inflationary environment would lower potential future “real returns” for tech stocks more than their counterparts in other industries.

Vaccine Update – With the approval of Johnson & Johnson’s COVID-19 vaccine, daily vaccine numbers are rapidly approaching 3M/day. Additionally, J&J anticipates being able to provide enough vaccines by midyear to vaccinate 1/3 of all Americans. This surge in production led President Biden to vow that vaccines would be available for every American adult by the end of May.

Data Points – There were several pieces of encouraging data released this week regarding economic output and overall sentiment.

  • The percentage of U.S. citizens satisfied with the current condition of the United States jumped from 11% in January to 27% in February, the highest level since March 2020.

  • U.S. manufacturing output increased at the highest pace in the last three years.

  • Residential construction spending jumped 1.7% last month, bringing residential spending, non-residential spending, and public spending all to their highest levels in over 10 years.



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/ Market Data (oil spot price, WTI Cushing, OK); (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.


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