Advisors - May 3, 2021
Monthly Market Wrap: April 2021
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These really are crazy times, aren’t they?
A few weeks and one brief correction later, the price of Dogecoin has gone even higher. Anyone out there become a “Dogecoin millionaire”?
Also in April, we digested a grand buffet worth of earnings reports as the majority of S&P 500 constituents updated shareholders on their Q1 2021 performances.
The second quarter of 2021 is in full swing, with these key developments occurring in April:
• Off the YCharts! Crypto: Come-up + Correction = Correlation
• Major Index Returns: April was, in fact, kind to stocks
• Sector Movement: 11 out of 11 Winners in April
• Hot Stocks of the Month: Earnings Pops
• Laggards & Losers: Earnings Drops
• Financial Market & Advisor News
• Economic Data: Business Is Booming All Around
Off the YCharts! Crypto: Come-up + Correction = Correlation
That was good alliteration, wasn’t it?
Speaking of cryptocurrencies, April was another breakout month for several crypto assets, including Bitcoin, Ethereum, Litecoin, and Cardano. But prices corrected just as fast. As market leader Bitcoin goes, so goes the rest of crypto, based on the following price correlations:
Major Index Returns: April was, in fact, kind to stocks
April has historically been a positive month for equities, and this year was no different. The NASDAQ rose 5.4% and the S&P 500 went right up with it, adding 5.3%. Internationally, Developed Markets gained 3.1% while Emerging Markets were up 2.5%. Fixed income assets got a long-awaited boost in April, with the Global Aggregate Bond Index and high yield corporate bonds up 1.3% and 1.1%, respectively.
Sector Movement: 11 out of 11 Winners in April
All 11 sectors posted positive gains in April. Leading the charge was Real Estate with an 8.3% gain, followed by a near three-way tie for second place among Financials, Consumer Discretionary, and Communication Services. Though down for most of the month, Energy eked out a 0.7% gain thanks to solid earnings from big oil names like Exxon Mobil (XOM).
Hot Stocks of the Month: Earnings Pops
April’s top ten stocks all made the list thanks to better-than-expected earnings reports. Blowout earnings from logistics giant United Parcel Service (UPS) and credit powerhouses Discover Financial Services (DFS) and Capital One Financial (COF) boosted their share prices significantly.
Strong earnings also helped Equifax (EFX), DISH Network (DISH), Pool (POOL), IQVIA Holdings (IQV), Seagate Technology (STX), Intuitive Surgical (ISRG), and Avery Dennison (AVY) make the cut for April’s ten best performers.
Laggards & Losers: Earnings Drops
Let’s give a warm welcome (back) to laggards Discovery (DISCA), Twitter (TWTR), and Penn National Gaming (PENN), who are in the bottom 10 for the second consecutive month. Twitter plummeted 15.2% after reporting weaker earnings relative to its big tech peers, while investors punished Discovery for its EPS miss and weak DTC subscriber numbers. Intel (INTC) sank on stellar earnings reported by rival chipmaker Advanced Micro Devices (AMD).
Disappointing earnings from Enphase Energy (ENPH), Hologic (HOLX), Citrix Systems (CTXS), Cabot Oil & Gas (COG), F5 Networks (FFIV), and American Airlines Group (AAL) round out April’s ten worst performers.
Financial Market & Advisor News
Your Complete Guide to Sector Rotation (YCharts)
ETFs see record inflows of $250 billion in first quarter (InvestmentNews)
Wall Street on Tax Plan: ‘It Will Incentivize Selling This Year’ (WealthManagement.com)
Economic Data: Business is Booming All Around
March’s unemployment rate clocked in at 6.0%, the lowest level since April 2020. Initial jobless claims steadily declined throughout April to 553,000 as of the month’s last print, the lowest level in the entire pandemic era.
Production and Sales
US New Single Family Houses Sold rebounded 20.7% in March after a sharp decline in February, while Existing Home Months’ Supply ticked up another 10 basis points to 2.1. The US house price index rose 0.9% in March, its weakest month over month growth since last May.
Have a great May! 📈
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Want to watch the Market Wrap rather than read it? Watch the five-minute recap of April’s events here: