The markets seesawed their way through the first half of February and the daily movements were frequently significant. Day-to-day changes were often a half of a percent or more.
Concerns continued to center around inflation and interest rates, although anxiety has eased somewhat over the last week as spikes in interest rates have failed to materialize.
The divergence between the Dow Jones Industrial Average and the NASDAQ Composite continues. Earlier this month the NASDAQ turned negative for the year while the Dow has posted several new record highs. This tends to signal a move away from technology stocks into more traditional growth and value companies which in turn indicates a continued economic recovery.
Last week Congress passed and the president signed a new COVID-19 relief package. Valued at nearly $2 trillion, this bill should continue to fuel the economic recovery. However, the size of this package will stoke fears of inflation. Opinions vary and we will continue to monitor the markets closely.
So far March has proven to be a strong month for the Dow and S&P 500. As of last Friday, the Dow was up 1,846 points (6%) month-to-date and the S&P 500 posted a gain of 132 points (3.5%) closing at a new record high. While the NASDAQ did briefly turn negative for the year, as of Friday’s close it did have a slightly positive return of 128 points (1%).
Looking forward, attention will focus on the continued vaccination effort and reopening of the economy. In another indicator of life returning to normal, Disneyland was given the OK to open on a limited basis next month. President Biden addressed the nation last week and shared his goal of limited gatherings by the 4th of July holiday.