February – March 2021

U.S. Economic and Market Highlights


  • International Monetary Fund (IMF) revised its forecast for global economic growth this year to 6%, up from 5.5% in January. This rate would represent the fastest global economic growth since 1980.
  • IMF also issued a warning about widening inequality and divergence between advanced and lesser-developed economies.
  • The updated forecast is a 6.4% growth rate in the U.S. attributed to fiscal support, accelerated vaccination, and robust economic activity.
  • U.S. economy added 916,000 jobs in March, 36% above the estimate, bringing the unemployment rate down to 6%.
  • U.S. is on course to hit a new record deficit in 2021 as domestic demand increased imports while ongoing Covid containment measures limit the opportunity for exports.
  • Eurozone’s issuance of permits for new homes varies by nation. The number of permits in the Netherlands, Belgium, and Turkey are higher and permits in Germany, France, and Spain are below pre-pandemic levels causing some concern about future construction. 

Fixed Income

  • 10 Year U.S. Treasury yield almost doubled from 0.9% to 1.7% over the first quarter 2021. The rate increase is consistent with a recovering economy and expectations of continued easing of COVID-19 restrictions. Market values of interest rate sensitive bonds were down for the quarter. (See Market Tracker below.)
  • The yield curve in the U.S. steepened as long-term rates rose and short-term rates remained relatively unchanged.
  • In E.U. and Japan, both short-term and long-term rates remained below, or near, zero as covid response and economic recovery delays persist.
  • Interest rate trends sparked investors’ attention toward U.S. bonds to achieve higher yields and better prices and strengthened the U.S. Dollar compared to other currencies.
  • Investment grade corporate bond returns were negative in the first quarter as interest spreads widened and prices decreased. High yield bonds fared better because they are more influenced by the macro-economic environment and individual company fundamentals.


  • Value stocks (i.e., energy, industrial, and financial companies) outperformed growth stocks (i.e., technology and communication) for two consecutive quarters, after a long run, more than a decade, of growth stocks outperforming value stocks.
  • Technology companies that lead the stock market rebound during Covid-19 have been relatively flat in 2021. High stock prices and recent threat of inflation have led investors to look to other sectors for returns. 
  • Stock market returns for 12 months ending March 31, 2021 are approximately 50% higher globally than last year at this time. March 23rd was the one-year anniversary of the market’s low point due to the Covid-19 outbreak.   
  • Market returns so far in 2021 have been positive in all categories, with small cap companies performing the best in the first quarter 2021.
  • Broad commodities significantly outpaced equities over the last six-months driven by higher prices and profits at energy and industrial metal companies.
  • Volatility Index (VIX) related to changing stock prices is currently below 20 for the first time since March 2020. The long-term average VIX is slightly above 20.  

The American Jobs Plan

  • The plan calls for $4 trillion in spending over 8 years, and $3 trillion in tax hikes over 15 years. The proposal consists of two parts.
  • The first part is focused on physical infrastructure which includes roads, bridges, rail lines, water and sewer systems, improvements to the power grid, money to expand broadband access, as well as money for American manufacturing, clean energy, and energy efficiency projects.
  • The second part, is referred to as the “care economy,” including healthcare, childcare, paid-leave, and education.

This communication was prepared for informational purposes only and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security/instrument or to participate in any trading strategy. Past performance is not indicative of future results.