Author: Ryan Frydenlund

Ryan Frydenlund

Financial News and Portfolio Management Discussion through February 22nd

Stocks were slightly down for the week as a sudden jump in interest rates made equities, and particularly growth stocks, less compelling.  The S&P 500 declined 0.7%, while the Dow was up 0.2% for the week.  Abroad, the FTSE All World Ex US edged up 0.2% for the week.  The yield on the 10-year Treasury yield finished the week at its highest level since February 2020, 1.34%, up from 1.20% to start the week.  Bitcoin rose above $50,000, doubling in less than two months.

In January, retail spending rose 5.3%, the most in seven months.

Meeting minutes from the Fed’s January meeting showed officials agreed to continue to hold the Fed Funds Rate near zero and to maintain their bond buying purchases.  While they thought that there may be an increase inflation, they didn’t believe it would be long lasting.

Initial jobless claims rose unexpectedly over the past week with 861,000 people filing for unemployment insurance and the previous week was revised upward by 55,000.

US business activity picked up pace with service sector and manufacturing output accelerating.

Financial News and Portfolio Management Discussion through February 13th

Stocks continued their recent climb on optimism over stimulus, corporate earnings, and the vaccine rollout.  The S&P 500 rose 1.2% and the Dow was up 1.0% for the week.  Abroad, the FTSE All World Ex US climbed 2.2% for the week.  The yield on the 10-year Treasury rose to 1.20% from 1.17%, ending at its highest level since February 2020.  Oil has surged recently ending the week at $59.47 a barrel its highest level since January 2020.

Newly reported COVID-19 cases have dropped 56% in the past month.

US January inflation was flat when an increase was expected.

Initial jobless claims dropped to 793,000, showing improvement.

Fed Chair Powell said the Fed is unlikely to consider raising interest rates or reducing bond purchase for the foreseeable future.

With 72% of companies reporting earnings to date 80% have reported that have topped expectations.

The Story of GameStop Stock

One month into 2021 and we already have online message boards and first-time investors attempting to take down hedge funds.  Although many articles have been written about what happened in January, we thought it was a great opportunity to discuss how we view the recent events.

The Story of GameStop StockRead more

Financial News and Portfolio Management Discussion through February 6th

Stocks posted their best week since November to close at new record highs.  Gains were driven by optimism over the potential for additional government stimulus measures.  The S&P 500 surged 4.6% and the Dow jumped 3.9% for the week.  Abroad, the FTSE All World Ex US climbed 4.1% for the week.  The yield on the 10-year Treasury climbed to 1.17% from 1.11%, ending at its highest level since March.

US employers added 49,000 jobs in January, returning to gains after job losses in December.  The unemployment rate fell to 6.3% from 6.7%, partially reflecting fewer people looking for jobs.

Official readings of industrial and services activities in China eased more than expected in January.

US manufacturing continued to expand in January through below expectations and at a slower rate than in December.

ISM’s service sector index grew more than expected in January.

Weekly unemployment claims improved with 779,000 people applying for aid.  The third straight week of declining numbers.

Jeff Bezos announced he was stepping down from his CEO role and would move to become executive chairman.

Of the 189 companies in the S&P 500 that have reported earnings to date, 81% have beaten estimates.

January Market Commentary

Market Commentary

US stocks declined slightly to start the new year as optimism at the beginning of the month gave way to concerns about the continued spread of the coronavirus.  The new administration announced plans for a $1.9 trillion stimulus relief bill which would include additional stimulus checks for individuals, buoying markets over the first half of the month, but the spread of a new, more contagious, strain of the virus and concerns over the vaccine effort weighed on the outlook to end the month.  Corporate earnings have also impressed to date with the majority of companies topping expectations.  Economic news over the month showed a mixed picture.  On the positive side, manufacturing activity hit its highest level in two years, household income rose for the first time in three months, business activity picked up pace and consumer confidence rose.  However, the December jobs reports showed a loss of 140,000 jobs while the unemployment rate remained at 6.7%.  New unemployment claims remain elevated and retail sales fell 0.7% in December.  Fourth quarter GDP grew at a 4% rate, but fell short of expectations.

Foreign stocks edged up in January led by emerging markets.  European markets ticked down over the month as a new, more contagious strain of the coronavirus spread across the continent and drove additional business restrictions.  Factories in Asia and Europe increased their output in December pointing to a strong manufacturing sector. Saudi Arabia announced it would cut oil production by 1 million barrels a month starting in February as it’s grown concerned over a resurgent coronavirus.  Oil prices climbed 7.6% over the month.  China posted GDP growth of 6.5% in the fourth quarter, and 2.3% for the year despite the pandemic.  It was the only major world economy to see growth in 2020.  Emerging markets outpaced developed markets over January and the trailing twelve months.

Bonds fell to start the new year as interest rates rose on the expectation of increased stimulus measures from the new administration.  The Fed concluded its January meeting keeping all its supportive policies in place.  They stated the economy has cooled off more recently as a result of the upswing in COVID-19 cases and supportive measures will be needed for some time. The 10-year Treasury yield ended the month at 1.11%, its highest level since March, up from 0.93% to start the year.  Over the month muni and credit bonds were the top performing sectors, while over the trailing year, credit bonds led the way.  Longer term bonds trailed shorter term bonds in January, but outpaced shorter term bonds over the last twelve months.

Index PerformanceJan.Trl. 12 Months
US Stocks (Russell 3000)-0.44%18.64%
Foreign Stocks (FTSE AW ex US)0.22%12.97%
US Bond Mkt. (BBgBarc Int. Gov/Cred)-0.28%4.93%
Municipal Bonds (BBgBarc 1-10 Yr Muni)0.35%3.13%
Cash (ICE BofA ML 3-Mo T-Bill)0.01%0.56%