Earnings reporting season is in full swing and (with 60% of the companies in the S&P 500 reporting actual first quarter results so far) 86% of S&P 500 companies have reported a positive earnings per share (EPS) surprise.

Stocks were mixed last week as large cap growth stocks – particularly technology - drove the gains. The S&P 500 rose 2.76%, the Russell 2000 declined 0.46% and the NADSAQ advanced 3.13%

Equities were mixed last week after dipping midweek once President Biden proposed a higher individual tax on investments for households above $1 million in annual income. It was the tax rate that was exactly as shown in his campaign literature plus an additional amount for the Affordable Care Act taxes.

Major indices around the world rose last week, the fourth consecutive week that the key U.S. indices recorded gains. The S&P 500 increased 1.39%, the NASDAQ added 1.10% and the Russell 2000 rose 0.86%. Overseas, the international developed markets (MSCI EAFE) gained 1.67% as the emerging markets (MSCI EM) increased 1.41%

The stock market continued its strong start to 2021 with the S&P 500 advancing 4.38% in March bringing the year-to-date returns to 6.17%. Even more impressive is the one-year return of 56.31%, coinciding with market bottom of March 24, 2020 caused by the COVID-19 induced market selloff.

The 10-year U.S. treasury rate crossed above 1% in January for the first time since March 2020. The committee still has a higher probability of rising long-term rates which, combined with a low-income starting point, keeps bonds still unattractive in our view.

In the worst weekly selloff since October, the markets were down across the largest global indices. The S&P 500 declined 3.29%, the Russell 200 lost 4.38%, and the NASDAQ was down 3.48%. The international developed markets index (MSCI EAFE) dropped 3.45% and the emerging markets index (MSCI EM) lost 4.44%.