Q1 2021 round-up: new highs for the US financial markets

Por: Miguel A. Rodriguez

18:18, 05 April 2021

First-quarter ended with gains for US major assets

The US markets jumped in the first quarter of 2021. The surge was based on two main themes: the $1.9 trillion stimulus package promised by Joe Biden, equal to almost 14% of the country's GDP, and the vaccine progress.

Dow-Jones Industrial Average (USA30)

The $2 trillion stimulus package unveiled by President Joe Biden to support its infrastructure was an important part of the index’s gains. Moreover, Federal Reserve Chairman, Jerome Powell provided an economic update and reiterated the central bank's stance to support the economic recovery. USA30 closed the quarter having the best month since November 2020. Overall, in the first three months of 2021, the index gained 6.8%. It marked the fourth consecutive quarter in the green.

S&P 500 (USA500)

New historic high – USA500 jumped over 4,000 points on April 1st. It closed the day at 4,019.87. Like its peer, it rallied due to the unprecedented US stimulus measures revealed by Joe Biden and expectations that inoculation against COVID-19 will kick-off an economic rebound.  USA500 ended the quarter 4.7% higher, hitting its fourth straight quarter of growth.

Nasdaq 100 (TECH100)

The Nasdaq was behind its peers, with a modest gain of 2.8%. The index underperformed, as tech stocks have been hit particularly hard by the rising of Treasury yields. However, the star of the show was Tesla, which surged 5% in just one day after it revealed that it would allow BTC payments.

US10Y Yields

The 10-year bond closed at a new high – 1.77%. It reported an 83bps (basis points) rise in Q1, marking the most significant quarterly gain since the final quarter of 2016 (85bps) and the second quarter of 2009 (87bps).

Crude oil

The American benchmark for oil declined 3.8% as the COVID-19 pandemic, and the Suez Canal's blockage continued to hit demand. However, the price stabilized at around $64 per barrel, as the OPEC+ group managed to reach a consensus. At the beginning of April, the alliance announced that it would gradually increase production by 350,000 barrels per day. Read more about it here.

GameStop

The abovementioned assets seem to have gained close to nothing compared to what might be the world's most recent sweetheart, GameStop. The stock ended the quarter 1,027% higher, pushing its valuation to $34 billion.

Closing words

The US economy is already showing signs of recovery. The latest reports from the Department of Labor indicated that in the past month alone, the non-farm payrolls came in at 916K, with the most significant number of new jobs reported in one of the most impacted sectors: leisure and hospitality.

Sources: Nasdaq.com, morningbrew.com

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