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Monthly Market Wrap: February 2021

Welcome back to the Monthly Market Wrap from YCharts, where we break down the most important market trends for advisors and their clients every month. As always, feel free to download and share any visuals with clients and colleagues, or on social media.

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As a third coronavirus relief bill floats its way through the United States Congress, investors are nervous about the impacts additional stimulus will have on an already depreciated US dollar, in addition to further ballooning of the national debt.

USD vs CAD, USD vs GBP, USD vs EUR as of March 2nd 2021

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Also this month, the FDA approved Johnson & Johnson’s (JNJ) single-shot COVID-19 vaccine, joining Pfizer (PFE) and Moderna (MRNA) as the third authorized provider in the US. Though less effective than competitors’ double-dose vaccines, J&J’s one-and-done solution would speed up vaccination rates rapidly. After all, unless you really want that second smiley face bandage and lollipop, wouldn’t it be nice to get just a single jab?

With 2021 in full swing, we’ll focus on these key developments in February:

Off the YCharts! Returning to Normalcy

Major Index Returns: Coming Back Down to Earth

Sector Movement: 7 out of 11 Winners in February

Hot Stocks of the Month: Bon Voyage!

Laggards & Losers: Healthcare, Technology Get Unplugged

Economic Data: Retail and Food Services, Durable Goods Surge


Off the YCharts! Returning to Normalcy

Speaking of jabs, we’ve added vaccinations to our library of Coronavirus (COVID-19) data available in YCharts. Use this data—ranging from cases, hospitalizations, and deaths per country to the number of people fully vaccinated—to further your investment decisions and communicate insights to clients.

In the world of investing, down-and-to-the-right charts typically cause frowns. But if you’re charting world coronavirus cases per day, deaths per day, and death rate, then it’s nothing but smiles! As both vaccine supply and the number of manufacturers grow, watch for an increase in people fully vaccinated, accelerating the return to normal life.

World Coronavirus Cases, Deaths, Death Rate, and Vaccinations as of February 28th 2021

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Major Index Returns – Coming Back Down to Earth

S&P 500, NASDAQ, Major Index Returns for February 2021

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After taking a breather in January, the S&P 500 rose another 2.8% in February. Despite giving back some mid-month gains, the S&P 500 posted the highest increase of the six indices. The NASDAQ followed a similar pattern, starting February off strong but finishing up only 1% after growth companies sold off due to fears of rising treasury rates. Internationally, Developed Markets and Emerging Markets added 2.3% and 0.8%, respectively. High yield corporate bonds tacked on a modest 0.4%, while the Global Aggregate Bond Index fell 1.7%.


Sector Movement: 7 out of 11 Winners in February

SPDR ETF Sector Movement, February 2021

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Energy led all sectors for the second straight month with a whopping 22.5% gain, thanks to rising oil prices that resulted from growing optimism on an economic comeback. Financials also won big in February, posting an increase of 11.6% on the back of rising interest rates. Sectors that failed to post gains in February were Consumer Staples, Consumer Discretionary, Health Care, and Utilities.


Hot Stocks of the Month: Ten Best Performers

Top ten stocks for February 2021

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OPEC cuts, vaccine progress, and sooner-than-expected growth in oil demand were a match made in heaven for Marathon Oil Corp (MRO), whose 53.3% gain earned the title for top stock of February 2021. Fellow oil & gas companies Apache Corp (APA) and Valero Energy Corp (VLO) also rose 38.2% and 36.4%, respectively, on the news. Alaska Airlines (ALK) gained 33.2%, as a growingly positive outlook on the North American summer travel season cleared it for takeoff. Cruise liners also set sail in February, with Royal Caribbean Group (RCL) jumping 43.5% and Carnival Corp (CCL) adding 43.3%.

Also making the cut for February’s top ten performers are Twitter Inc (TWTR), L Brands Inc (LB), Live Nation Entertainment Inc (LYV), and Tapestry Inc (TPR).


Laggards & Losers: Ten Worst Performers

Worst performing stocks, February 2021

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The healthcare sector’s pulse slowed down in February, as shares of PerkinElmer Inc (PKI), Cerner Corp (CERN), DaVita Inc (DVA), and Viatris Inc (VTRS) all sank at least 12% on a mixture of price target cuts, disappointing earnings, and lower-than-expected full year guidance. Shares of Tesla Inc (TSLA) were down 15% for the month on news that the global chip shortage forced manufacturing of the company’s Model 3 vehicle to be temporarily halted, in addition to investor resizing of electric car maker valuations.

Technology also pressed the pause button, with Leidos Holdings Inc (LDOS) and Akamai Technologies Inc (AKAM) leading the list of market laggards, and Qualcomm Inc (QCOM) hitting the brakes on a rapid run up from its 52-week low back in March. Rounding out February’s ten worst performers are Clorox Co (CLX) and Equinix Inc (EQIX).


Financial Market & Advisor News

Bond ETFs hammered by growing inflation bets (InvestmentNews)

How to Visually Explain the Rise in Treasury Yields (YCharts)

Warren Buffett’s 9 Nuggets of Wisdom for Investors: 2021 (ThinkAdvisor)

Bitcoin Hits $1 Trillion Value as Crypto Jump Tops other Assets (WealthManagement.com)

Free Download: Breaking Down ESG & SRI Funds (YCharts)

Robinhood, Finra Working on Settlement Over Outages, Options Trading (FA-IQ)


Economic Data 

Employment

January’s unemployment rate clocked in at 6.3%, the lowest level since April 2020. Initial jobless claims started off high in February but fell to 730,000, the lowest amount in nearly three months.

Production and Sales

US Retail and Food Services Sales boomed in January, jumping 5.3% from December. Durable goods orders were also strong, 3.4%. Their monthly changes were considerably above their respective averages.

Retail Food and Services Sales, Durable Goods Orders for February 2021

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Housing

US New Single Family Houses Sold leveled off in January but still recorded a 4.3% increase from December. Existing Home Months’ Supply remained unchanged at 1.9, and the US house price index inched up 0.1% in January.

Consumers

Prices and spending tapered off in January. The US Consumer Price Index rose a slight 0.02% from December, while consumer spending (PCE) dipped 0.1%.

 

Have a great March! 📈

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