Weekly Economic Update presented by Meld University

Weekly Riddle:

I have a bed, but I never sleep. I have a mouth, but I never speak. What am I?

Tune in next week for the answer.
(Last week's riddle and answer can be found near the end of this post.)

Join us for our next event: Rollover and Play Dead. Does Your Estate Plan Really Work? with speaker Lynn Campisi, J.D., LL.M.

The webinar will be held on April 20th at 3:00 PM Central Time. There is no cost to attend, but you must register in advance.

 

Weekly Economic Update

LAST WEEK AND THE ECONOMY

A solid start to earnings season and positive economic news propelled U.S. equities to more record highs. Both inflation and retail sales figures improved substantially, and the latter doubled expectations. Vaccination efforts in the U.S. and abroad may be hampered by the distribution pause for the Johnson and Johnson vaccine. Reports of blood clotting issues in some recipients are to blame for the halt.

The S&P 500 rose 1.37% last week while the Dow Jones Industrial Average gained 1.18%. The Nasdaq Composite index grew 1.09% and the MSCI EAFE index, which tracks developed overseas stock markets, rose 1.63%.

J&J Vaccine Distribution Paused

Distribution of the Johnson & Johnson vaccine has been put on hold as officials study a serious side effect seen in a small number of recipients. Blood clots have been reported in eight individuals who received the J&J vaccine, most of them women under 60. It is suspected that these blood clots form because of the intense immune response created by the vaccine.

There have been approximately 7.4 million Americans who received this vaccine. Although blood clotting is very rare, experts were willing to put the vaccine distribution on hold. There are concerns that some people may not notice symptoms of this illness until it accelerates to a stroke, meaning the incident rate could be underreported.

The Johnson & Johnson vaccine made up only 5 percent of the United States COVID-19 vaccine supply, so its pause is not a huge blow to the vaccination effort. The two other distributers in the U.S., Pfizer and Moderna, may pick up the slack in the U.S., but other countries more dependent on this vaccine may run into shortages. Similar blood clotting problems have been reported in the AstraZeneca vaccine, which is popular in Europe. Dr. Fauci, White House Chief Medical Advisor, expects the vaccine to resume distribution as soon as Friday but with an extra warning label.

Inflation and Retail Sales Beat Expectations in March

Inflation picked up in the U.S. last month and beat expectations as the economy continues to strengthen and prepare for a post-pandemic consumer. The consumer price index rose 2.6% over the past twelve months and 0.6% since February. Core CPI, which excludes food and energy prices, rose 1.6 over the past year.

A healthy piece of last month’s inflation growth was the 9.1% jump in gasoline prices, which can adversely impact consumer spending in other areas if it continues its upward trend. In addition, year-over-year inflation figures may be inflated to some extent for the next few months due to prices being severely depressed in the early months of the pandemic, which was about one year ago.

Retail sales smashed expectations, jumping 9.8% last month. This was a welcome rebound from a February filled with severe weather spells and bolstered by the arrival of a third-round of stimulus checks. Restaurant and bar sales climbed 13.4%, spending on sporting goods rose 23.5%, gas station receipts were up 10.9%, and apparel sales jumped 18.3%. Car and motor vehicle parts sales even grew 15.1% despite production cuts stemming from the worldwide semiconductor shortage.

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Key Economic Data

Unemployment Rate:             6.0% (As of March 2021 – Next Report: 5/7/21)

FOMC Target Rate:                 0 – 0.25% (As of March 17, 2021 – Next Report: 4/28/21)

Data Sources: U.S. Bureau of Labor Statistics, FRED – St. Louis Fed

Weekly Quote:

Empty pockets never held anyone back. Only empty heads and empty hearts can do that.
-Norman Vincent Peale

The Week Ahead – Key Economic Data

Wednesday: EIA Petroleum Status Report.

Thursday: Existing Homes Sales, Jobless Claims.

Friday: PMI Composite Flash, New Home Sales.

Source: Econoday

The Week Ahead – Companies Reporting Earnings

Monday: The Cocacola Company (KO), United Airlines Holdings Inc (UAL)

Tuesday: Netflix Inc. (NFLX), Johnson & Johnson (JNJ), Lockheed Martin Corporation (LMT)

Wednesday: Verizon Communications Inc. (VZ), Nextera Energy Inc. (NEE)

Thursday: AT&T Inc. (T), Intel Corporation (INTC), American Airlines Group Inc. (AAL), Southwest Airlines Co. (LUV)

Friday: American Express Company (AXP)

Source: Zacks

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Weekly Tip:

April is Financial Literacy Month, so it’s a great time to speak with a financial professional about your retirement plan.

Closing value of some major equity indices.
S&P 500 chart at end of last week.

Data Sources: Yahoo Finance, WSJ

Join us for our next event: Rollover and Play Dead. Does Your Estate Plan Really Work? with speaker Lynn Campisi, J.D., LL.M.

The webinar will be held on April 20th at 3:00 PM Central Time. There is no cost to attend, but you must register in advance.

 

Last Week's Riddle and Answer

Last Week's Riddle:
A man is found murdered in his office. The suspects are Peter, Julie, Jason, Molly and Brian. In the office is a calendar with the numbers 6,4,9,10,11 written in blood. Who is the murderer?

Last Week's Answer:
Jason is the killer. The numbers ‘6,4,9,10,11’ indicate months, and the first letter of each month spells the name of the murderer. The 6th month is June and the first letter of June is ‘J’, the 4th month is April and the first letter of April is ‘A’, and so on.

Securities Offered Through Triad Advisors, LLC. Member FINRA/SIPC Advisory Services Offered Through Meld Financial Inc. Meld Financial, Inc. and Triad Advisors, LLC. Are Not Related. The information contained herein should not be construed as legal advice or a legal opinion on any factual situation. Its contents are intended for general information purposes only. Always consult with a competent professional service provider for advice on tax, accounting, and other financial matters specific to your situation.

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

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Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.