Daily Market Color April 1, 2021S&P hits 4,000, Yields Fall to Start Second Quarter S&P 500 breaches 4,000 for the first time despite rising initial jobless claims, rates fall ahead of jobs report The S&P started off the second quarter by blowing past 4,000 for the first time, the Nasdaq and DJIA ending the day in the green as well. Treasuries rallied after initial jobless claims showed a surprise increase in workers filing for unemployment, pulling yields and swap rates lower across the curve. The rally accelerated throughout the day, and rates would ultimately close on the lows- the 10-year Treasury yield falling 7bps to 1.67%. Tomorrow’s jobs report (which is keeping the bond market open in a holiday-shortened session) will be closely watched, with forecasts currently calling for a +660k increase in nonfarm payrolls and a decline in the unemployment rate to 6%. Tomorrow, the bond market will close early at 12:00 ET while the stock market will remain closed for Good Friday. U.S. manufacturing expands at fastest rate since 1983 The ISM index of national factory activity increased to 64.7 in March, up from 60.8 in February. A reading above 50 indicates growth. March’s reading was the highest since 1983 and beat economists’ estimates of 61.7. Initial jobless claims unexpectedly rise Initial jobless claims increased to 719,000 last week with economists expecting claims to be 675,000. Claims are projected to decrease in the coming months due to increasing vaccinations and opening economies. Tomorrow’s monthly employment report is expected to show strong jobs growth in March. Economists median forecasts currently project 625,000 jobs gained with some economists expecting an increase of 1 million jobs.
