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Weekly Market Commentary – April 16, 2021

Economic Data

Data has shown that the recovery is strong and on track. CPI is higher than street estimates (0.6% actual vs 0.5% expected) but still moderate. Retail sales rose 9.8% vs 6.1% estimate. Housing starts were 1.74 million vs 1.62 million estimated.


Rates

As we expected, the yield curve has flattened in general over the past week. We expect it to continue to flatten next week. Surprisingly, the strong retail sales and CPI didn’t steepen the yield curve, which shows that there is strong buying pressure in the longer end of the curve. This matches with our expectation as long bonds are becoming more attractive.

Equity

The equity markets continue to push higher as economic data shines. Nasdaq slightly underperformed the other two major indices but we expect Nasdaq to regain its crown in the coming weeks.


What to look for next week?

There isn’t much going on next week. The equity market continues to push higher as our economy recovers. As long-term investor ourself, we pick growth stocks over value stocks because growth stocks will win no matter what if your time horizon is long enough.


Happy weekend everyone and see you next week!

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