A rocky week with wide price swings led to mixed results for stocks last week, as investors grappled with anxieties over economic growth and weakness in technology and other high-growth stocks.
The Dow Jones Industrial Average added 1.36%, while the Standard & Poor’s 500 gained 1.57%. The Nasdaq Composite index fell 0.58% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 1.67%.1,2,3
After a promising start to the week, stocks turned negative on mounting concerns about economic growth in Europe, with broad losses in energy, cyclicals, and technology.
Though bond yields backed off their highs and Secretary of the Treasury Janet Yellen and Fed Chair Jerome Powell both struck an optimistic tone on the economy, stocks posted back-to-back losses on Tuesday and Wednesday.
Thursday trading was emblematic of the week’s volatile action. The S&P 500 dropped nearly one percent earlier in the day following Powell’s comment about the Fed eventually rolling back its bond purchase program, then rallied to close with a 0.5% gain.4
Stocks rallied into the Friday close, pushing the Dow and S&P 500 into positive territory and paring the losses on the Nasdaq Composite.
Tech Remains Under Pressure
The losses in technology and other high-growth stocks in recent weeks have largely been attributed to the sharp and rapid rise in bond yields.
So, it was both interesting and a bit confounding that last week saw yields pull back, and rather than helping support these companies’ stock prices, many technology stocks continued to decline. The failure to rally on lower yields may be pointing to other reasons for their price weakness. Some are concerned about current prices, and believe there may be better growth opportunities in more fairly-valued companies. The “fear of missing out” that propelled investors to pile into these stocks over the last twelve months appears to have moderated.
This Week: Key Economic Data
Tuesday: Consumer Confidence.
This Week: Companies Reporting Earnings
Tuesday: Lululemon Athletica (LULU), Chewy, Inc. (CHWY).
Reporting Cash Payments
Expecting a little extra cash from a gift, sale, or trade? The IRS wants to know. Individuals, corporations, and partnerships to report cash transactions of more than $10,000.
These cash payments can include jewelry sales, a gift from a family member, an overseas purchase, or any other cash transaction. You also need to report cash payments that were received in one lump sum, in two or more related payments within 24 hours, and as part of a single transaction or two or more transactions in the last year.
Luckily, reporting cash payments is simple. All you have to do is file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. The form requires information about both the giver and the receiver of the cash, a description of the transaction, and information about any other parties involved.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov5
Christine likes grapes but not potatoes. She likes squash but not lettuce, and peas but not onions. Following the same rule, will she like pumpkins or apples?
Last week’s riddle: I have no heart or mind, but I do have two legs. Yet they only touch the ground when I am not carrying things around. What am I? Answer: A wheelbarrow.
Footnotes and Sources
2. The Wall Street Journal, March 26, 2021
3. The Wall Street Journal, March 26, 2021
4. CNBC, March 25, 2021
5. IRS.gov, September 19, 2020
6. MindFood.com, September 23, 2020
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