Markets Higher on the Back of Tech Stocks…..

U.S. equities finished higher, getting a boost from the Information Technology sector amid the cooling in bond yields, while the gains were held in check by some softness in Energy and Financials stocks. The markets parsed through a second-straight week of accelerating jobless claims, as well as yesterday’s minutes from the March Fed meeting that preserved expectations that monetary policy will remain highly accommodative. Meanwhile, Fed Chairman Jerome Powell took part in an IMF panel discussion on the global economy, providing nothing new on the policy front, but offering an upbeat outlook with a shade of caution. Some support also seemed to radiate from the White House suggesting it is open to negotiating corporate tax increases to pay for the $2 trillion infrastructure spending bill. Treasuries gained ground, putting downside pressure on yields, and the U.S. dollar extended a recent rollover, while gold was higher and crude oil prices ticked lower. On the equity front, Costco Wholesale posted stronger-than-expected March same-store sales, while Constellation Brands topped Q4 expectations but issued softer-than-expected guidance. Europe finished mostly higher, while markets in Asia were mixed.

The Dow Jones Industrial Average rose 57 points (0.2%) to 33,504, the S&P 500 Index increased 17 points (0.4%) to 4,097, and the Nasdaq Composite was up 140 points (1.0%) at 13,829. In moderate volume, 851 million shares were traded on the NYSE and 4.1 billion shares changed hands on the Nasdaq. WTI crude oil lost $0.17 to $59.60 per barrel. Elsewhere, the Bloomberg gold spot price was $17.89 higher at $1,755.61 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.4% lower at 92.09.

Jobless claims unexpectedly accelerate, bond yields and U.S. dollar continue to cool…..

Weekly initial jobless claims came in at a level of 744,000 for the week ended April 3, above the Bloomberg estimate of 680,000, and compared to the prior week’s upwardly revised 728,000 level. The four-week moving average rose by 2,500 to 723,750, and continuing claims for the week ended March 27 declined by 16,000 to 3,734,000, north of estimates of 3,638,000. The four-week moving average of continuing claims decreased by 105,750 to 3,862,000.

Treasuries were higher, as the yield on the 2-year note dipped 1 basis point (bp) to 0.15%, while the yields on the 10-year note and the 30-year bond decreased 5 bps to 1.62% and 2.31%, respectively. Bond yields have declined this week after the rate on the 10-year note hit a 14-month high and the U.S. Dollar Index extended a recent rollover back below its key 200-day moving average. The moves have come as economic data has been solid to preserve expectations of a robust economic recovery, while so far not stoking further inflation concerns. This has helped keep the Fed from having to signal when it may begin to tweak its extremely accommodative stance.

©2021 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.