Market Data as of Week Ending: 7/2/2021 unless noted otherwise
U.S. stock prices advanced as the S&P 500 Index ended the week on another record high. Investor sentiment was supported by a combination of mostly positive economic data and a few companies reported better than expected quarterly earnings. Second quarter S&P 500 earnings expectations increased throughout the quarter and analysts are currently forecasting an earnings growth rate of 63.6%. Large cap companies outperformed their small and mid-cap peers and growth stocks outpaced their value counterparts. Sector leadership shifted again this past week as gains were most notable in the information technology, consumer discretionary, and health care sectors. A combination of cyclical and defensive sectors such as energy, financials, utilities, and real estate lagged. Developed foreign stocks in Europe and Asia underperformed U.S. stocks while Emerging Market stocks lagged both developed foreign and U.S. markets.
U.S. Treasury yields declined as the 10-Year note ended the week at 1.42%, which is the lowest level since March. All segments of the bond market delivered gains for the week. Long-term government bonds were the best performing segment while short-term government bonds lagged. Investment grade corporate bonds ended the week with yields slightly above 2.0% and high yield corporate bonds are yielding approximately 4.0%.
Economic data was favorable and headlined by the significant drop in jobless claims data. Initial claims for jobless benefits fell to a new pandemic of 364,000 as the labor market appears to be on the solid ground for a durable recovery. The Conference Board’s index of consumer confidence improved for the fifth consecutive month and reached its highest level since the pandemic in March 2020. Other notable economic data included the ISM Manufacturing PMI data that came in slightly below expectations but still at a strong number of 60.6 and the S&P/Case-Shiller home prices advanced by nearly 15% through the 12 months ended in April, the largest increase since December 2005. Economic data in Europe has been improving as the IHS Markit’s eurozone purchasing managers’ index (PMI) reached its highest level on record at 63.4 in June.