The Big Picture
The US stock markets all traded higher and near all time highs in this short Easter week. The 10-year treasuries finished higher at 1.72%. While fiscal stimulus is still seen as a positive for stocks there are growing concerns about inflation and an overheated economy. The prospect of higher taxes is another potential catalyst to undermine the bullish narrative.
More details were announced on the 2.25T dollar infrastructure plan which will span over 8 years. Many related stocks gapped higher although this package is likely to be more of a slow-burner and will take time and negotiations to pass through Congress.
The US economy added 961,000 jobs in March, way more than expectations with estimates at 675,000. The unemployment rate fell to 6%. While this is seen as a clear sign of a recovering economy there are still 8 million jobs missing compared to pre-pandemic level.
The stock market indices were all up this week: in the US the Dow lagged with just a 0.2% gain, while the Nasdaq strongly rebounded (+2.6%) and the S&P500 finished 1.1% higher. In Europe, the Stoxx gained 1.2% and the Italian index rose by 1.3%. The Danish OMX20 finished 2.6% higher. The US Dollar keeps gaining over the Euro (0.3%). Crude $oil was stronger (2.7%) and $Gold finished marginally lower (-0.1%). $BTC-USD gained 5.8% this week after last week’s decline.
Notable earnings included $LULU which reported a rise in comp sales of 21% but guided lower on EPS for FY21, and $MU which beat on both the top and the bottom line and guided higher: I think $LULU is too expensive here whereas I like $MU which seems grossly undervalued and has a forward PE of 8.6 which is very low for a company that is still growing at 18% per year.
All of our stocks have reported Q4 earnings. The Q1 2021 earnings season will commence in two weeks’ time.
Our Danish stocks paid their annual dividends earlier this year. Italian stocks traditionally pay an annual dividend in late May. US stocks distribute quarterly dividends.
Our portfolio gained 1.5% this week whereas the weighted average of the relevant market indices finished 1.4% higher, corresponding to a 0.1% market beat.
This week’s portfolio winners were $ADSK and $UMC with a 5.5% and a 4.9% gain, respectively. Some of the tech stocks which gave up gains in February and March seem to be waking up again. The semiconductor sector is still on fire as the industry struggles to keep up with demand.
Our Responsible Investor portfolio is now up 31.6% (32.6% including dividends) in 44 weeks and is beating the market by 3.4% over the same period. We are about 62% in stocks & ETFs and 38% in cash.
The table below summarises the portfolio performance since inception.
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