Equity markets were mixed last week, with significant dispersion across sectors. Cyclicals performed well, including energy (+10.1%), financials (+4.4%), industrials (+3.1%), and basic materials (+2.5%). Conversely, large cap technology stocks continued to struggle as they have for much of 2021, pulling the Nasdaq into the red for the week. Meanwhile, midcap stocks were higher while small caps were lower, narrowing the 2021 performance gap between the two. International stocks were mixed as well.

The selloff in Treasuries continued unabated last week: 10y yields rose 17bp, while 30y yields were up 15bp. Credit spreads, which began 2021 already on the tight side of historical averages, have been unable to compress enough to offset the move in rates, leading to price declines in corporate bonds across the credit spectrum. The only part of the bond market that remains in positive YTD total return territory is high yield (aka, sub-investment grade), owing to its shorter duration and lower exposure to Treasury yields.

Oil lurched higher last week after OPEC+ surprised the market by extending output cuts into April. Meanwhile the US dollar surged to its highest level since late November, relative to a basket of international currencies.

Friday’s jobs report was encouraging, as nonfarm payrolls (+379k) increased sequentially for the second consecutive month after falling into negative territory in December. See the Chart of the Week for a time series.