The Long and Short of it, week ending 07 May 2021

Publication Type: Market Commentaries

The value versus growth trade continued last week with both the S&P 500 Index and the Dow Jones Industrial Average ending the week at record highs while the Nasdaq Composite Index finished the week lower. Strong earnings reports, continued expectations of a strong post-pandemic economic recovery along with growing inflation concerns - exacerbated by Treasury Secretary Yellen’s comments on Tuesday and emphasized by Monday’s ISM Manufacturing Index release - helped push cyclical stock prices higher while hindering tech stock prices last week. Friday’s much weaker-thanexpected payroll report had limited negative effect on stock prices with some analysts attributing the weakness to labor shortages resulting from high unemployment benefits and a dearth of childcare facilities (benefiting value stocks) while others believed the weak report showed a need for continued fiscal and monetary stimulus (benefiting growth stocks). For the week, the S&P 500 Index increased 1.2% to 4,232.60, the Dow Jones Industrial Average increased 2.7% to 34,777.76, the Nasdaq Composite Index decreased 1.5% to 13,752.24, the 10-year U.S. Treasury rate fell 5bps to 1.58% and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 1.2%.


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The Long and Short of it, week ending 07 May 2021

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