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Weekly Updates

Broad Gains Across Sectors Lead S&P to New High

Weekly Update – April 02, 2021

  • The S&P 500 index ended the trading week up 1.1% and reached new highs Thursday above the 4,000 mark, kicking off the second quarter of 2021 on a strong note amid optimism for accelerating vaccine distributions and improving economic data.
  • The market benchmark ended Thursday’s session at 4,019.87, up from last Friday’s closing level of 3,974.54, marking a record closing high. Thursday also was the first time the S&P 500 has ever traded above 4,000 and featured a new intraday record of 4,020.63. This week’s trading ended on a Thursday because the market will be closed Friday for the Good Friday holiday.
  • Thursday marked the first day of Q2 following a Q1 in which the S&P 500 rose 5.8% as COVID-19 vaccine distributions expanded under the new Biden Administration in the US. The index rose 4.2% in March.
  • While COVID-19 cases began rising again in recent weeks after having fallen significantly from a January peak, investors are starting Q2 with hopes that increased vaccinations will help the US combat the pandemic and boost the economy. Roughly 16% of the US population has been fully vaccinated so far, with some 29% having received at least one dose.
  • Pfizer (PFE) and BioNTech (BNTX) on Friday provided an encouraging update on their vaccine, saying their latest findings show it was 91.3% effective against COVID-19 for six months after the second dose. Six-month safety data also showed a favorable safety and tolerability profile, the companies said. The update came a day after Pfizer and BioNTech reported the vaccine demonstrated 100% efficacy and robust antibody responses and was well tolerated in a Phase 3 trial in children ages 12 to 15.
  • Also boosting hopes for an economic rebound, US President Joe Biden unveiled a $2.3 trillion infrastructure plan Wednesday focused on fixing roads and bridges, expanding broadband internet access, and boosting funding for research and development.
  • Investors awaited the US Labor Department’s March jobs data, released Friday.
  • The report will follow a Wednesday release by ADP showing the US private sector added more jobs than analysts expected in March, driven by more work in services industries such as leisure and hospitality as businesses continued to reopen from COVID-19 restrictions on operations. Also, Thursday’s release on weekly jobless claims showed that while filings rose last week, the four-week moving average fell to its lowest level since the pandemic began in March 2020.
  • By sector, communication services and consumer discretionary had the largest percentage increases this week, up 3.4% and 2.2%, respectively. Gains were also posted by technology, utilities, industrials, real estate, and financials. Meanwhile, consumer staples had the largest percentage drop off the week, down 0.8%, followed by a 0.6% slip in health care. Energy and materials were also in the red for the week.
  • The gainers in communication services included Interpublic Group (IPG), up 3.2% on the week. S&P Global Ratings boosted its outlook on the advertising and marketing company’s credit rating to stable from negative, saying an accelerating US economic recovery bodes well for the advertising market and IPG.
  • On the downside, shares of Constellation Brands (STZ) fell 1.4% for the week as RBC Capital Markets said unfavorable weather conditions and capacity issues are expected to impact the company’s beer sales. RBC said Constellation Brands’ beer business remains “fundamentally strong” but that strong consumption will continue to result in “out-of-stocks.”
  • Next week, Monday’s economic reports will include March readings on the services sector from Markit and the Institute for Supply Management. Other data due next week include the February trade deficit and consumer credit, both due Wednesday, and the March producer price index on Friday.
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