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    Capital Markets | 4 min read

    Market Commentary: Week of April 26, 2021

    Last Week

    It was quite a volatile week for stocks as the markets swung between euphoria and fear. Continued strong economic data and bullish first quarter corporate earnings provided the bid for equities and corporate bonds. However, the Biden White House’s proposal for a sharp increase in Long-Term Capital Gains tax and uneasiness about a sharp rise in COVID cases, hospitalizations, and deaths—particularly in India—stoked fears that global trade will be handicapped. This provided downward pressure on risk assets. Additionally, global supply-chain bottlenecks have caused a sharp increase in energy and raw materials causing concerns that inflation will be higher and longer lasting than the Fed currently believes. With that said, Treasury yields seem to have found a comfortable range.

    • The S&P 500, while volatile, ended up nearly unchanged week-over-week. The average daily move was .83%.
    • The NASDAQ, like the S&P 500, had a very volatile week but ended up week-over-week with a modest decline. The average daily move for the week was 1.09%.
    • The 2-year Treasury yield was flat for the week, closing at .16% on Friday.
    • The 10-year Treasury yield fell 2 basis points for the week, closing at 1.56% on Friday.
    • The VIX Index arrested its multi-week slide, increasing 7% for the week, and closing at 17.33 on Friday.
    • The MOVE Index decreased 4% for the week, closing at 59.98 on Friday.
    • 5-year Investment Grade Corporates (as measured by Markit CDX) widened 2 basis points for the week, closing at 52 basis points on Friday. High-yield corporate debt (as measured by Markit CDX) widened 7 basis points for the week, closing at 296 basis points on Friday.
    • US Dollar Index dropped 0.8% for the week, closing at 90.86 on Friday.
    • WTI Crude dropped 1.7% for the week, using the June WTI Futures contract, and closing at 62.14 Friday.
    • Gold, as measured by the June 2021 futures contract, was mostly unchanged for the week, closing at 1,777 on Friday.
    • Bitcoin fell 18.2% for the week, closing at 52,229 Friday.

    The Week Ahead

    We come in Monday morning with global equities mixed and Treasury yields a bit higher. We have a heavy week, and the Fed’s FOMC meeting and subsequent policy statement on Wednesday. The FOMC announcement is highly anticipated, as economic growth and inflation pressures continue to build. The question is, will the Fed offer any clues on a change in timing for at least some monetary policy normalization? We think the strong majority of FOMC participants will signal continuity, but we could get an outlier or two that perhaps move their rate-rise projections a quarter or two closer than previously stated. It could be a volatile week for interest rates. Stay tuned!

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    An index is unmanaged and not available for direct investment. Definitions sourced from Bloomberg.

    • The Bloomberg Barclays Global Aggregate Negative Yielding Debt Market Value Index represents the portion of the Bloomberg Barclays Global Aggregate Index that measures the aggregate value of global debt with a negative yield.
    • The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.
    • The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.
    • The Cboe Volatility Index® (VIX) is a calculation designed to produce a measure of constant, 30-day expected volatility of the US stock market, derived from real-time, mid-quote prices of weekly S&P 500® Index (SPX) call and put options with a range of 23 to 37 days to expiration.
    • The ICE BofA MOVE Index is a yield curve weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of implied volatilities on the CT2 (Current 2 Year Government Note), CT5 (Current 5 Year Government Note), CT10 (Current 10 Year Government Note), and CT30 (Current 30 Year Government Note), with weights 0.2/0.2/0.4/0.2 respectively.
    • The Markit CDX North America Investment Grade Index is composed of 125 equally weighted credit default swaps on investment grade entities, distributed among 6 sub-indices: High Volatility, Consumer, Energy, Financial, Industrial, and Technology, Media & Tele-communications. Markit CDX indices roll every 6 months in March & September.
    • The Markit CDX North America High Yield Index is composed of 100 non-investment grade entities, distributed among 2 sub-indices: B, BB. All entities are domiciled in North America. Markit CDX indices roll every 6 months in March & September.
    • The U.S. Dollar Index (USDX) indicates the general international value of the USD. The USDX does this by averaging the exchange rates between the USD and major world currencies. Intercontinental Exchange (ICE) US computes this by using the rates supplied by some 500 banks.


    Investing involves certain risks, including possible loss of principal. You should understand and carefully consider a strategy’s objectives, risks, fees, expenses and other information before investing. The views expressed in this commentary are subject to change and are not intended to be a recommendation or investment advice. Such views do not take into account the individual financial circumstances or objectives of any investor that receives them. All indices are unmanaged and are not available for direct investment. Indices do not incur costs including the payment of transaction costs, fees and other expenses. This information should not be considered a solicitation or an offer to provide any service in any jurisdiction where it would be unlawful to do so under the laws of that jurisdiction. Past performance is no guarantee of future results.

    Securities offered through SWBC Investment Services, LLC, a registered broker/dealer. Member FINRA & SIPC. Advisory services offered through SWBC Investment Company, a Registered Investment Advisor, registered as such with the US Securities & Exchange Commission. SWBC Investment Services, LLC is under separate ownership from any other named entity. SWBC Investment Services, LLC a division of SWBC, is a nationwide partnership of advisor.

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    John Tuohy

    John Tuohy is CEO of SWBC Investment Services, LLC, a Broker/Dealer and SWBC Investment Company, an SEC Registered Investment Advisor (RIA). In his role, John is responsible for identifying, developing, and executing the division's strategic plan and all business development, sales, and marketing activities.

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