Market Commentary — May 3, 2021

Stocks touched record highs last week as investors focused on corporate earnings season. A rise in oil prices also provided a boost to energy stocks.

There were big earnings and revenue beats from Facebook and Google. Both Refinitiv and FactSet are currently expecting overall earnings for the S&P 500 to have increased over 30% compared with the first quarter of 2020, when the economy first felt the impact of the pandemic and lockdowns. This would be the fastest growth rate in over a decade and significantly higher than prior estimates, thanks to an unusually high percentage of earnings beats.

On Thursday, the Commerce Department reported that gross domestic product (GDP) expanded at an annualized rate of 6.4% in the first quarter, helped by a hefty increase in government spending. In other positive economic news, weekly jobless claims fell to a pandemic-low level of 553k, and consumer confidence hit its highest level (121.7) since February 2020.

The Fed met last week and although Chairman Powel raised concerns about some “froth” in the market in his post-meeting press conference, he reiterated it would be quite some time before rate increases.

There is continued positive news on the U.S. pandemic front as daily cases receded and restrictions were eased on wearing masks outdoors. New York City is expected to completely reopen on July 1st.

The situation in Emerging Market countries remains a problem, with the U.S. now sending its 60 million doses of AstraZeneca vaccine abroad. The U.S. will also begin restricting travel from India effective May 4 as the COVID surge there continues to devastate the country.

To use an airline analogy, we have placed the mask over our face, but now its time to help others breathe as well.

Jane Edmondson
CEO and Co-Founder

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