By Nicholas Jasinski |
Friday, February 5
We apologize for the delay in sending Thursday’s Review
& Preview. We had a glitch in our delivery process last night.
Friendly Trend. The S&P 500 streched its winning
streak to a fourth day Thursday, closing up 1.1% at an all-time high. The Nasdaq
Composite likewise hit a record, up 1.2%, while the Dow
Jones Industrial Average gained 1.1% and is within striking
distance of its Jan. 20 record. Not to be forgotten, the small-cap Russell
2000 jumped 2% Thursday, to close at—you guessed it—a record
high.
Last week's vaccine pessimism and economic
recovery concerns didn't last long, with cyclical and pandemic-sensitive stocks
and sectors handily outperforming defensive and stay-at-home beneficiaries this
week—as they have since the fall.
Treasury yields have also risen since Monday and
the yield curve is at its steepest since 2017. That signals continued
comfort with the narrative of a healing economy and expectations of some
healthy inflation coming up. Alexandra Scaggs has more on that
here.
The catalyst for the recent improvement in
sentiment has been some significant progress on the Covid-19 front, although
from a terribly high level of daily infections, hospitalizations, and deaths.
Nonetheless, all three measures have declined back to their pre-Thanksgiving
levels in the past week or so.
Add to that the ongoing vaccine rollout, and things
should continue to point in the right direction. And it's often the
prevailing trend that is all that matters for the market.
As for the economic recovery, Thursday morning's
initial jobless claims for the latest week also showed continued improvement.
They came in at 779,000, still at a high level relative to pre-pandemic times,
but well off the 900,000 they hit at the start of the year.
Read about Friday's January jobs report here.
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