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Weekly Market Recap

Risk assets rallied around the world last week, with equities, bonds, andcommodities all moving higher. In US equity markets, the Dow and S&P 500both finished the week at fresh all-time highs, while the Nasdaq closed lessthan 1% off of the high set back in February. Small and midcap indices delivered strong performance on the week, pushing further into double-digit return territory for 2021. International stocks also rallied, although they continue to lag the US market on a YTD basis.

Bond markets rallied as US Treasury yields fell. Benchmark 10y yields were down 8bp on the week and are now 16bp lower during the month of April. Credit spreads were stable last week, allowing corporate and municipal bonds to see price gains from the move in Treasuries. See the Chart of the Week for a time series of 10y US Treasury yields.

Oil rallied last week on lower US inventories and an increase in the global demand forecast from OPEC+. Other commodities resumed their upward trajectory as well, including natural gas, gold, copper, and aluminum.

US economic news was mostly positive, with jobless claims, retail sales, housing metrics (permits, starts, builder sentiment), consumer sentiment (U of M), and industrial production all improving sequentially. Meanwhile, the vaccine rollout continues to move forward at a rapid pace in the US, with much more mixed results elsewhere in the world.

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Patrick Lundergan achieves CFP® Designation

Albion Financial Group is proud to announce and celebrate the firm’s newest Certified Financial Planner®. Financial Planners are engaged in the detailed aspects of the financial advising relationship. Their efforts make it possible for our clients to seamlessly envision and plan for a variety of prospective scenarios. Their contribution to the team is essential as we work to guide clients toward making a lifetime of good financial decisions.

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Michelle Buxton on KPCW Mountain Money

Albion Senior Wealth Advisor Michelle Buxton was a guest on Park City’s NPR radio affiliate KPCW discussing the role of tax deferred accounts (IRAs, Roth IRAs, 401Ks, 403Bs, etc) yesterday. With the IRS pushing back the tax deadline this year, investors have more time to contribute to their IRAs. Michelle also reflects on some of the lessons learned from covid and the importance of having liquid assets (money at your local bank) to weather unexpected storms. Michelle’s interview segment begins at 44:00.

Click the link to listen:

https://www.kpcw.org/post/mountain-money-april-12-2021#stream/0

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Weekly Market Recap

US large cap stocks were strong last week, with all sectors in the S&P 500
posting positive returns except for energy. The Dow (33,801) and S&P (4,129) both closed at record highs on Friday, while the Nasdaq remains slightly below its high from mid-February. Results were mixed in other segments of the market, with US midcaps higher, US small caps lower, international developed markets posting solid gains, and emerging markets off a touch.


Bond markets also rallied over the course of last week, despite PPI data that came in higher than expected. Benchmark 10-year US Treasury yields fell 6 basis points, while 2y yields were down 4bp and 30y yields down 3bp.
Investment grade credit spreads were steady, while high yield spreads rallied ~10 basis points, allowing riskier bonds to outperform.

Energy prices fell last week as investors weighed the impact of renewed
restrictions on mobility and economic activity in Europe. The broader
commodity complex was mostly stable, as it has been for the past month.
In economic news, US PPI inflation data came in much higher than expected.


Core PPI (ex food and energy) rose 0.7% sequentially and 3.1% y/y (a 10-year high). See the Chart of the Week for a time series. Meanwhile, the newly released FOMC Meeting Minutes showed that the Fed remains committed to continuing its asset purchases until substantial further progress has been made towards its 2% inflation target (PCE Deflator) and full employment.

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Weekly Market Recap

Equities posted solid returns last week, led by large cap technology stocks. The S&P 500 reached a new all-time high on Thursday, closing above 4,000 for the first time.

Rates were fairly subdued last week. The Treasury curve flattened modestly, pivoting around the 10-year point, with 2y yields higher by 5bp while 30y yields fell by 2bp. Credit spreads tightened in sympathy with the broader rally in risk assets, allowing corporate bonds to post solid gains.

Oil and the US dollar were both stronger on the week.

Incoming economic data was encouraging. The Conference Board’s Consumer Confidence Index rose sharply to 109.7, and the ISM Manufacturing Index surged to 64.7, both of which represent pandemic highs.

Friday’s monthly payroll report was also very strong:

* Nonfarm payrolls = +916k (largest monthly gain since August 2020)

* U-3 Unemployment = 6.0% (fell 0.2% sequentially)

* U-6 Underemployment = 10.7% (fell 0.4% sequentially)

* Labor Force Participation Rate = 61.5% (rose 0.1% sequentially)

* Average Weekly Hours Worked = 34.9 (rose 0.3 hrs sequentially)

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Weekly Market Recap

Equities were mixed last week as the world watched the Suez Canal drama unfolding. Most sectors generated positive returns allowing the S&P 500 and the Dow to finish the week higher, while price declines in some large-cap communications names pulled the Nasdaq lower. Small caps were also lower on the week, as were many international stocks.

Bond markets mostly rallied last week. Treasury yields were lower as the curve flattened modestly, while credit spreads were stable.

Oil prices gyrated day by day as investors grappled with the impact of the Suez blockage on short term global supply.

Economic news was mixed last week. On a positive note, jobless claims hit new pandemic lows, and the University of Michigan consumer sentiment index registered a large sequential index. At the same time, personal incomes & spending, capital goods orders, and home sales all fell.

Finally, in two days of testimony before the US Congress, Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen both pledged to continue supporting the economic recovery and downplayed concerns about runaway inflation caused by excessive monetary and fiscal stimulus. As the Chart of the Week shows, the Core PCE Deflator (the Fed’s preferred inflation metric) remains below its 2% target.

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Weekly Market Recap

US equities were mostly lower last week. Among large caps, a few sectors managed to finish in positive territory, including traditional defensives like communications (+0.5%), healthcare (+0.4%), and consumer staples (+0.4%).

The worst performing sector by far was energy (-7.7%), driven by falling oil prices and flagging demand as much of Europe institutes new lockdown measures to combat rising covid-19 case counts. See the Chart of the Week for a time series of YTD returns for the energy sector vs. the S&P 500.

Rates markets also continue to be in focus. After briefly stabilizing somewhat during the prior week, US Treasury yields resumed their upward march last week, with benchmark 10y yields rising 10 basis points and the 2s10s curve reaching its steepest level (+157bp) in more than five years. Credit spreads compressed slightly, but not by enough to offset the rate move, driving small price declines in USD-denominated bond markets.

Economic data was mixed last week, with retail sales (-3.3% m/m ex autos & gas), industrial production (-2.2% m/m), and housing activity (-200k bldg. permits m/m) all coming in below expectations, while jobless claims were steady. On a more positive note, the Conference Boards Index of Leading Economic Indicators (LEI) improved sequentially for the 10th consecutive month. Most importantly, the Fed reiterated its commitment to keeping interest rates low and maintaining asset purchases until substantial further progress has been made towards full employment.

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How Albion Does ESG

Jason Ware presents an introduction to ESG investing. This presentation was originally delivered at a Women of Albion virtual event on February 25, 2021.

ESG stands for Environmental, Social & Governance. The idea is to invest in companies that believe in more than the bottom line. Companies can and should do more within a broader mandate taking into account all stakeholders, not just shareholders. At Albion, we have taken a unique approach using this philosophy in constructing our ESG portfolio. This is embodied in the following quote:

“Society is demanding that companies…serve a social purpose. To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.” ~Larry Fink, BlackRock CEO

This is an audio version of the same ESG presentation.
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Meet Albion’s New COO

SALT LAKE CITY, March 16, 2021 /PRNewswire/ — Albion Financial Group announced today that Mason Woolf has been named Chief Operating Officer of the firm. In a clear sign of Albion’s growth and progress, the COO role has been created to oversee all company policies, processes, day-to-day management, coordination across teams, and organizational planning — with a particular focus on keeping the firm’s operations on track. Additionally, the COO works closely with our CEO to implement tactical as well as larger strategic goals in effort to facilitate improvements across all of Albion’s functional areas.

“For nearly a decade and a half Mason has been an essential member of the Albion Team, and over the last several years has served to integrate and improve several of our core functional groups. Naming Mason COO both recognizes the esteem his peers have for him and formalizes the critical work he already performs,” said John Bird, President and CEO of Albion.

Since joining the firm in 2006 Woolf has served on Albion’s Investment Team, and for the last decade has been Director of Trading. Mr. Woolf also serves as Chief Compliance Officer, safeguarding the firm’s fiduciary integrity. He has recently joined Albion’s Board of Directors and assists with setting the long-term vision of the organization.

“Four decades ago nearly everyone in the industry thought Albion was crazy for choosing a business model that placed client interests above all else. Now, every money manager in the world is pursuing our model. Having witnessed the power of Albion’s fee-only fiduciary approach during my past 15 years as a member of this team I am thrilled to have the opportunity to serve as Chief Operating Officer. This role has long been a goal of mine, and I greatly appreciate both the support and trust placed in me by our team as we forge this path together. Albion has an incredibly bright future and we look forward to the next 40 years of guiding our clients through a lifetime of good financial decisions.”

A 25-year veteran of the industry, Woolf spent his early career with Dean Witter, Arlington Value Management, and Fidelity Investments. Woolf holds a Master of Business Administration from the Gore School of Business and a Bachelor of Science in Finance from Westminster College. He is also an honored inductee of Utah Business Magazine’s prestigious Forty Under 40, a select group of executives and business leaders to watch (2020).

About Albion Financial Group

Albion Financial Group was founded in 1982 in Alta, Utah by Toby Levitt and John Bird. The firm was an early pioneer of fee-only fiduciary investment and financial advising – providing world-class financial planning and investment management services while working to eliminate the conflict of interests prevalent in the industry. The team of 28 professionals provide service to individuals, families and closely held businesses with a geographic reach that extends from Utah’s Wasatch Front to states and locales across the nation.

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Weekly Market Recap

Equity markets rallied last week, particularly after Wednesday’s release of consumer price inflation (CPI) data that was slightly below consensus estimates. The S&P 500 and the Dow both finished the week at fresh all-time highs, while the Nasdaq remains ~5% below its mid-February record. Small and midcap stocks continued their run of dominant performance, extending their YTD lead over large caps. International indices also finished higher.

Rates drifted lower for much of the week before abruptly moving higher on Friday. In the end, 10-year yields rose 5bp on the week to 1.62%, the highest close since February 12, 2020. 30-year yields rose 8bp to 2.38%, the highest level since late 2019. Investment grade credits spreads where largely unchanged while high yield spreads tightened, resulting in moderate price declines for high quality corporates while riskier bonds were close to flat.

Oil prices fell early in the week and then rallied; the US dollar did the reverse.

In an encouraging sign for the labor market, weekly jobless claims (new and continuing) reached their lowest levels of the pandemic in data released on Thursday. See the Chart of the Week for a time series.

Finally, in a Thursday night address to the nation, President Joe Biden announced that he would direct all US states to make vaccines available to any adult that wants one by no later than May 1st.