Infrastructure Plans Boost Optimism

June 29, 2021

June 21-25, 2021 Recap

Infrastructure Plans Boost Optimism

From Worst to Best
U.S. equities rebounded last week with the S&P 500 transitioning from its worst week since January to its best week since February. Risk-on equity buying was driven by optimism surrounding President Joe Biden’s endorsement over a bipartisan Congressional infrastructure spending deal that should be additive to the pace of economic recovery. Meanwhile, in testimony before Congress, Fed Chairman Powell again played down run-away inflation fears, saying he has a level of confidence that prices will eventually come down, and it would be “very, very unlikely” for a repeat of 1970s-style inflation.

For the Week…
The S&P 500 rallied 2.76% last week, the Dow Industrials surged 3.44% and the tech-heavy Nasdaq Composite advanced 2.36%. The small cap-focused Russell 2000 outperformed, gaining 4.33% with small cap growth performing best, up 4.54% versus a 4.14% gain on small cap value.

Consumer Spending Plateaus
Household spending was unchanged last month (+0.4% expected). April consumer spending was however upwardly revised to a 0.9% increase (from +0.5%) on a combination of increased savings and rising vaccinations, amid a reopening economy. Consumer spending has overtaken pre-pandemic levels and suggests that 2Q GDP will be very strong.

Broad-Based Gains
All 11 major sector groups within the S&P 500 posted gains last week, with Energy (+6.66%) back in headliner status as best weekly performer. Financials (+5.28%) and Industrials (+3.05%) followed as next-best gainers. Consumer Staples (+1.94%), Real Estate (+1.33%) and Utilities (+0.66%) rose the least. With 2021 nearly half over, Energy (+49.44%) and Financials (+26.51%) are up the most year-to-date.

Treasury Prices Ease, Yields Rise
Benchmark 10-year Treasury yields rose last week to end at 1.54% on Friday as expectations continue to be range-bound within a 1.35% to 1.59% range for the next several weeks. The U.S. Dollar Index weakened by 0.41% last week and U.S. WTI crude oil futures gained 1%.

Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.