Daily Market Color April 29, 2021Equities and Yields Rise on Positive Economic Data S&P closes on a record high as yields increase The reflation trade was in full force on the day as continued impressive corporate earnings and strong economic data fueled both equities and yields. The annualized 1Q GDP print of 6.4% and jobless claims hitting a pandemic low of 553,000 led all three major equity indices into the green with the S&P closing on a record high, increasing 0.68% on the day. Yields and swap rates were up across the curve with the 10y UST yield increasing 3bps to close at 1.63%. The 10y is now up 8bps since finishing the previous week at 1.55%. Consumer spending drives 1Q GDP 1Q GDP printed at 6.4% driven by household spending. Rising vaccinations, accelerating job growth, and two rounds of federal stimulus all attributed to the increased spending in 1Q. The GDP report also revealed the price index for personal consumption expenditures, excluding food and energy, increased to an annualized 2.3% compared to 1.3% in 4Q 2020. Jobless claims hit another pandemic low U.S. jobless claims fell to another pandemic low last week with 553,000 initial claims. Jobless claims have continued to improve in recent weeks due to vaccination progress and economies opening up across the nation.
