Weekly Investment Update

US stocks rose last week after declining in January. With the week’s gain of nearly 4.7 percent, the S&P 500 index is now positive for the year by 3.6 percent^[1]. Better-than-expected fourth quarter corporate earnings, the prospect of additional fiscal stimulus, and the rollout of COVID-19 vaccines are likely influencing investor optimism. These trends are also likely driving interest rates higher, which has challenged fixed income returns so far in 2021. The interest rate on 10-year US Treasury notes has been generally rising since August 2020, and returns on the broad bond market benchmark, the Bloomberg Barclays US Aggregate Bond index, have been declining as a result. Higher interest rates should be better for savers in the long-run, but the upward move in rates over the last several months has not been productive for existing holders of government debt.

US Treasury Interest Rates

This week will be relatively quiet with respect to economic data, but investors will be watching continued signs of progress toward additional fiscal stimulus in the form of new relief from the COVID-19 pandemic, including direct payments to Americans. Several large consumer-oriented companies will also report their fourth quarter 2020 results, such as Toyota, General Motors, Coca-Cola, Pepsi, and Disney. 

Key Economic Releases This Week

Asset Class Returns

Prices & Interest Rates