The Bottom Line
● Global equities were little changed for the week with the S&P 500 essentially flat while the Nasdaq, Russell 2000, and international stocks were slightly negative.
● The yield on the benchmark U.S. 10‐year Treasury note climbed +0.07% to 1.63% as commodity prices continued to rally and inflation expectations continued to rise.
● Transportation stocks are at all‐time highs after 13 straight weeks of gains, their longest winning streak in 122 years. Railroads, airlines and trucking companies make the Dow Jones Transportation Average, which is up + 23% this year as investors reward companies that will benefit from the U.S. returning to normalization.
Americans get back out and about.
Global equities were little change for the week, with the S&P 500 essentially flat at +0.02%, while the Nasdaq Composite and Russell 2000 small cap index fell less than half a percent. Although technology has been the driving force for markets since the pandemic recovery began more than a year ago, it has been old fashioned railroads, airlines, and trucking companies that are enjoying strength lately. The Dow Jones Transportation Average gained +1.4% last week, marking its 13th consecutive weekly advance, which is the index’s longest streak since it rose for 15 straight weeks in January 1899. The Transportation index is up +23% this year, to all‐time highs, and well ahead of the +10‐15% gains other U.S. indices are up. The Transportation’s strength underscores investors’ high expectations for a rebounding economy that will benefit companies carrying goods and raw materials as Americans get back out and spend again. And spend they did. The U.S. reported a +6.4% first quarter GDP growth fueled by a surge in personal consumption, to a +10.7%annual rate, the second best rate of spending since the 1960s. Corporate earning have maintained their impressive growth, now running at +45.7% with about 60% reported.
Digits & Did You Knows
RENT IS DUE —The median asking monthly rent rose to$1,463 in March across the country’s 50 largest markets, according to a report from Realtor.com. That’s a +1.1%increase on an annual basis and the first month where the pace of rent growth increased since last summer, the report showed. The Covid‐19 vaccine rollout and rising employment are prompting more people to move back into cities and look for apartments to rent (source: Realtor.com, WSJ).
STICKER SHOCK — The median sales price of existing homes sold in the U.S. was $329,100 in March 2021, an all‐time high both on a nominal basis and on an inflation‐adjusted basis (source: National Association of Realtors, BTN Research).
Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.
Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a
Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management
(“PCWM”) and Qualified Plan Advisors (“QPA”).
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