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    Capital Markets | 4 min read

    Market Commentary: Week of January 25, 2021

    Last Week:

    Another strong week for equities as new all-time highs were set yet again for the S&P and NASDAQ. President Biden’s inauguration went off without a hitch and some confidence rose that the new administration will attack the virus with a more coordinated federal effort and aggressively push the $1.9 trillion stimulus-relief package.

    Meanwhile, earning season for stocks has been relatively solid. Interest rates held the line, remaining mostly unchanged, as, for now, rates appear to be stuck in a pretty narrow range ahead of this week’s meeting of the Federal Open Market Committee (FOMC). Last week saw another elevated weekly initial jobless claims figure as COVID-19 has begun to clamp down on the gig economy again.

    • The S&P 500 rose 1.9% for the week. On Thursday, the index hit yet another all-time high. The average daily move for the week was .63%.

    • The NASDAQ advanced 4.2% for the week, setting a new all-time high on Friday. The average daily move for the week was 1.03%.

    • The two-year Treasury yield declined two basis points for the week, closing at .12% on Friday.

    • The 10-year Treasury yield was unchanged for the week, closing at 1.08% on Friday.

    • The VIX Index declined 10% for the week, closing at 24.34 on Friday.

    • The MOVE Index decreased 4.5% for the week, closing at 43.09 on Friday.

    • Five-year Investment Grade Corporates (as measured by Markit CDX) were unchanged for the week, closing at 52 basis points on Friday. High-yield corporate debt (as measured by Markit CDX) widened two basis point for the week, closing at 306 basis points on Friday.

    • U.S. Dollar Index fell 0.5% for the week, closing at 90.24 on Friday.

    • WTI Crude was unchanged for the week using the March WTI Futures contract, closing at 52.27 on Friday.

    • Gold, as measured by the February 2021 futures contract, advanced 1.5% for the week—closing at 1,856 on Friday.

    • Bitcoin dropped 15% for the week, closing at 33,856 on Friday.

    The Week Ahead:

    Stocks—primarily tech stocks—are up as we start the week in the U.S. In Europe, however, the continent is dealing with the outbreak of the new variant of COVID-19 by increasing both the scope and the duration of lockdowns to combat the virus. Similarly to the U.S., Europe is running into vaccine distribution problems.

    The big event this week will be the Fed’s FOMC statement and press conference on Wednesday. The bond market is looking for reassurance that there will be no quantitative easing tapering. We think you can take that reassurance to the bank. Chairman Powell has strongly indicated multiple times that we are a long way from a policy change. We do not think the Fed will look to “swap out” monetary stimulus in the event strong fiscal stimulus comes. If anything, the Fed may increase Treasury purchases to control supply.



    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.

    © 2021 SWBC. All rights reserved. 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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