Receive Weekly Market Updates via Email


Weekly Market Update for April 9, 2021

by JM Hanley

Stocks enjoyed a strong week after an excellent jobs report last Friday, when the market was closed. The economy added 916,000 jobs last month, almost 40% higher than expected. Previous months were revised higher as well. New jobs were added across a broad array of economic sectors. In fact, employment in sectors hit hardest by the virus – like restaurants and hotels – still appears to have plenty of “room to run.” That suggests further job growth as those sectors reopen. Of those unemployed, more reported their condition to be temporary rather than permanent, another positive sign.

Other economic data was mixed. Initial jobless claims came in higher than expected. Claims have continued to be a fly in the ointment of an otherwise recovering labor market. Data from state labor bureaus suggests this could be something of a mirage, as increased unemployment benefits have encouraged those who probably wouldn’t qualify to apply anyway. Elsewhere, PPI – which measures inflation for firms, a favorite metric of the Fed – came in higher than expected. Fed Chair Powell nonetheless stuck to his guns in a speech at the IMF, insisting the economy had far to go before the Fed would consider raising rates.

The rise in stocks masked notable dispersion. Growth stocks (like tech companies) did better than value stocks (like most industrial and energy companies) for the second week in a row. Growth has gained back some of the ground it ceded in February, when vaccines and the stimulus bill precipitated a rise in interest rates and a rotation into value.

What are the causes for the recent rebalancing? The growth-value rotation may simply have run its course. Beyond that, bad news about the AstraZeneca vaccine continues. These concerns have slowed Europe’s vaccination efforts, and could slow vaccinations in the rest of the world. A slower pace of reopening might weaken the coming economic boom and inflation. That could keep interest rates lower for longer, which would favor growth stocks.

Additionally, prospects for the Administration’s infrastructure proposal have dimmed somewhat. As proposed, it would have spent three trillion dollars over ten years on roads, broadband, public housing, climate change, and job training, partially funded by raising the corporate tax rate. This would amount to additional stimulus that contributed to near-term growth and inflation. Moderate Democrats have resisted the tax increases, suggesting the size of the package could shrink.

First-quarter earnings begin next week with the big banks. Markets anticipate 25% growth market-wide, the highest rate since the third quarter of 2018. Analysts will be tuned in to management commentary on cost increases and supply chain problems, and whether these costs can be passed along to consumers. They’ll also want to hear whether or not consumer preferences have shifted permanently as a result of the pandemic.

The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes to assist in explaining factors that may have had an impact in the past or may have an impact in the future on client portfolios or composites. All expressions of opinion reflect the judgment of the firm on this date and are subject to change. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Investors should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All investors are strongly urged to consult with their tax advisors regarding any potential investment.

Performance quoted is past performance. Past performance is not indicative of future performance. There is always a possibility of loss. Current performance may be lower or higher than performance shown. Differences in performance versus the indices/funds may be attributable, in part, to differences in the asset make-up of the strategy vs. the indices/funds. Performance calculations are based on the reinvestment of dividends and gains unless these amounts were paid out to the client. Performance is subject to revision. See for important strategy disclosures.

This does not constitute a recommendation of any investment strategy or product for a particular investor. Investing involves risk; principal loss is possible. Investors should consider the investment objectives, risk, charges, and expenses of the strategy carefully before investing. This and other important information can be obtained by contacting Ulland Investment Advisors.


Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464