Market Recap Week Ending March 5

Monday – Dow +603 to 31,535 Nasdaq +396 to 13,588 and the S&P +90 to 3,901. Between the weekend approval of Johnson and Johnson’s (JNJ) new one dose Covid-19 vaccine and the fact that the yield on the U.S. 10-year Treasury has seemed to stabilize, the market exploded higher in a broad-based rally. Tech, Financials and Energy led all eleven sectors of the S&P higher today…The February ISM manufacturing number was 60.8, versus January’s number of 58.7 which matched the best number in the last three years. Above 50 is considered expansionary and anything above 55 is considered exceptional…Speaking of exceptional, Zoom Video (ZM) traded up 9% with the rally today and then jumped another 8% post-close after crushing top and bottom-line expectations.

Tuesday – Dow (144) to 31,391 Nasdaq (230) to 13,358 and the S&P (31) to 3,870. Chief Chinese banking regulator, Guo Shuqing, stated that markets in developed countries are trading at “high levels.” Apparently, this was enough to send all three indices lower today despite the U.S. 10-year retreating slightly to 1.41%. Ten of the eleven S&P sectors traded down with only the Materials sector trading higher…On the Covid front, President Biden announced that every adult in the country will be able to be vaccinated by the end of May, a two month improvement to the former timeline…Target (TGT) reported and what a report it was! Their 2020 sales growth of $15 billion was more than the combined sales growth of the company over the last ELEVEN YEARS! The company easily beat top and bottom-line expectations but traded down on a combination of not providing earnings guidance for 2021 and the announcement that they would spend $4 billion a year over the next several years as they continue to open new stores, remodel existing locations, and invest in online fulfillment…Nordstrom (JWN) beat their numbers but traded down on elevated levels of inventory which they expect to sell through during Q1…

Wednesday – Dow (121) to 31,270 Nasdaq (361) to 12,997 and the S&P (50) to 3,819. The ADP Private Payroll report showing an add of 117k jobs in February was underwhelming as expectations were for 225k and were worse than the 174k jobs added in January. On top of that, the yield on the 10-year U.S. Treasury which had seemed to have stabilized at around 1.40%, jumped to 1.47%. These two data points tore into all three indices, sending them lower for the day. Eight of the eleven S&P sectors traded lower today although the big winners year to date 2021, continued to ride the wave; Energy and Financials…Snowflake reported better revenue numbers, confirmed guidance and announced the elimination of their dual class stock structure. The stock fell 8% during the day but rebounded 1.45% post-close.

Thursday – Dow (346) to 30,924 Nasdaq (274) to 12,723 and the S&P (51) to 3,768. The yield on the benchmark 10-year U.S. Treasury continued its ascent, closing at 1.57%. Fed Chair Powell’s comments at a Wall Street Journal conference were partly to blame as he gave no hint of either moderating bond purchases or perhaps beginning another “Operation Twist” whereby the Fed sells short term bonds and buys longer dated securities (which helps push down long term rates). As a result, the exodus from equities continued. Nine of the eleven S&P sectors traded down with only Energy and Communication Services trading in the black. The Nasdaq turned negative year to date, down 1.3% and the tech heavy index is now down more than 10% from its 52-week high…Jobless claims continued to improve with 745k claims vs 750k expected and last week’s 736k claims…Costco (COST) reported and missed on earnings while beating on revenues; the stock traded down 2% post-close.

Friday – Dow +572 to 31,496 Nasdaq +196 to 12,920 and the S&P +73 to 3,841. February Non-Farm Payrolls printed a “goldilocks” jobs increase of 379k, much better than expectations of 210k. That was good enough to encourage investors to buy the market but not so high as to warrant the Federal Reserve raising rates or curtailing their monthly bond purchases. As a result, all three indices jumped higher and all eleven S&P sectors traded higher led by what else, Energy, Industrials and Communication Services.

 

 

 

Disclaimer: This is not a recommendation to buy or sell any of the securities listed above.  I personally, or a family member whose account I control, have positions in the following securities…AAPL, Bitcoin (physical), Chainlink (physical), Ethereum (physical), GBTC, GME April $20 Puts, LAZR, and VLDR.