Your Weekly Blip 3/12/21

Your Weekly Blip 3/12/21

President Joe “Big Bucks” Biden signed the ARPA yesterday unleashing a $1.9 Trillion wave of cash on the US economy and setting July 4th as a target for a return to normalcy. While inflation data is “tame” interest rates on the 10-year Treasury rose which caused a selloff in tech stocks while value plays like banks, steel, travel and manufacturing continue to rise. At the close the Dow was at a fresh high of 32,778 up 293 points to finish out the trading week. Trading volume continued to lag. For the week the Dow was up over 4% in a break above resistance levels to all-time highs while the NASDAQ was up about 3% as it recovers from a recent pullback.
Comparing the tech heavy NASDAQ with the Dow over the past year and so far this year, you can see the shifts in performance which lends support to the importance of diversification. In 2020 the NASDAQ was hotter than a camp stove with a 42% return while the Dow plodded along earning just over 7%. This year however the Dow is already up 6% while the NASDAQ is up 4%. 2020 was a banner year for tech while value stocks lagged the recovery. With rising interest rates and the passing of a huge stimulus bill, value stocks look poised to catch up somewhat to tech as the 2021 investing year unfolds.
Next week Bill will be on vacation while the intrepid John and Cleo continue to hold down the fort.