Week in Review: March 12, 2021

Despite ongoing nervousness about higher rates, markets ended the week higher. For the more cyclically oriented Dow Jones Industrial Average, it was a record week, as the venerated index notched five consecutive record highs. In addition, both the S&P 500 and Russell 2000 (U.S. small cap companies) also ended the week at record highs. And after officially slipping into contraction territory on Monday (defined as a 10%+ pullback from a record high), the NASDAQ managed to rally 5.6% over the following four days.

The 10-Year Treasury yield rose 0.05% over the course of the week, to end at 1.62%, its highest level since last February. The breakeven rate on the 10-Year Treasury, defined as the difference between the nominal yield on the 10-Year Treasury and that of the 10-Year TIPS (Treasury Inflation-Protected Security), exceeded 2.3%, for the first time since early 2014.

On Thursday, President Biden signed the $1.9T stimulus bill into law. Among other measures, the bill will send direct payments of up to $1,400 to millions of Americans, some of which began to be received over the weekend

This week marked the one-year anniversary of when the world “shut down” in response to the coronavirus pandemic. Since then, over 119M global cases have been recorded, along with 2.64M deaths, including over 533K in the U.S. A year later, with multiple vaccines having been approved and over 100M doses having been administered in the U.S., the global economy is moving closer to a full “reopening”.  In the US, the pace of vaccinations has now reached 2.1M/day.