Medicare Agent News: Big Tech Is Back

Monday, April 5, 2021

Big Tech Is Back

By Alex Eule | Monday, April 5

Delayed Gratification. Last week's jobs report arrived with a bang -- and no one around to notice. Stock markets were closed for Good Friday. So, with 72 hours to consider the data, investors seemed particularly sure of themselves.

The S&P 500 jumped at the open today, closing up 1.4%, while the Dow Jones Industrial Average gained 374 points, or 1.1%. Both indexes finished at all-time highs.

Meanwhile, the Nasdaq Composite, not far removed from its 10% correction, is on a roll. The tech-heavy index jumped 1.7%, its third consecutive 1%-plus rise. Over the last three sessions, the Nasdaq is up 5.1%. It's now less than 3% off its Feb. 12 all-time high.

After selling off tech stocks because of rising rates, investors seem to have gotten comfortable with the higher rate environment. It has helped that rising yields have plateaued -- at least for now. The yield on the 10-year Treasury note was essentially flat today, settling at 1.72%.

Investors are also positioning for what's likely to be a banner earnings season. The major reports kick off next week, with JPMorgan Chase's first-quarter report on the calendar for April 14.

Christine Short at Wall Street Horizon writes that there's "a ton of optimism priced in." She calls it the first “apples-to-apples season when it comes to comparing year-over-year earnings periods that had the impact of the Covid-19 pandemic."

Strategists are currently expecting S&P 500 earnings to be up 24% from a year ago.

Ryan Detrick, chief market strategist for LPL Financial, explains today why he's once again boosting his forecasts:

The U.S. economy’s recovery from the pandemic continues to surpass our expectations, aided by the accelerating vaccine distribution, massive stimulus, and America’s desire to resume some semblance of normal daily life. Despite having raised our 2021 economic and earnings growth forecasts on Feb. 8, we are doing so again. We are also raising—and narrowing—our 10-year Treasury yield forecast range. Our S&P 500 Index target remains unchanged.

The big picture is that spring has arrived, and investors are feeling optimistic.