Weekly Market Commentary 2/12/2021
-Darren Leavitt, CFA
Markets rallied to all-time highs on continued positive sentiment surrounding the reopening of global economies and on the fear of missing out on further gains. Markets opened the week on a strong note with Treasury Secretary Janet Yellen suggesting the US economy could meet full employment if an additional tranche of stimulus is in place. Cyclical sectors such as energy, financials, and semiconductors led the way.
Later in the week, the broader market traded sideways, perhaps consolidating the large move seen in the prior week. Infection and hospitalization rates continued to decline over the week as governments jockeyed to secure more vaccine doses. Fourth-quarter earnings continued to impress, but the results were met with mixed price action. Bitcoin soared to over 47k on news that Tesla has purchased 1.5 billion worth of the cryptocurrency and announced that the company would now accept Bitcoin as payment for their products. Additionally, MasterCard and Bank of New York announced cryptocurrency initiatives.
For the week, the S&P 500 added 1.2%, the Dow gained 1%, the NASDAQ tacked on 1.7%, and the Russell 2000 rose 2.5%. The US yield curve continued to steepen as the 10-year bond yield inked an 11 month high. The 10-year yield increased three basis points to close at 1.20%, while the 2-year note yield inched up one basis point higher to 0.10%. Gold prices increased by $10.20 on the week to close at $1823.10 an Oz. The price of oil continued to move higher, almost touching $60 a barrel, which buoyed the energy sector. WTI prices gained 4.5% or $2.58 to close at $56.89 a barrel.
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