Services PMI Hits Record High, the Market Leadership Fight Continues, and High-Yield Spreads Narrow
April 26, 2021 | FIRESIDE CHARTS
After failing to keep pace with the manufacturing recovery through much of 2020, the U.S. Services PMI has joined the Manufacturing PMI in hitting a new record high as vaccinations roll on and demand climbs. And during a big week for earnings—approximately a third of the S&P 500® Index report this week—we’ll be keeping a close eye on the ongoing fight for leadership. After a decade of outperformance, could the mega-caps—or large-caps as a whole—soon see a reversal of fortune? And we’ve said it before, but it’s worth a reminder: this market recovery has been unprecedented and there are no guarantees about the path forward. Still, a look at the high-yield spread shows investors feeling confident about the state of credit and default risk.
1. Both the U.S. Manufacturing and Services PMIs are well above the pre-pandemic levels:
Source: The Daily Shot, from 4/26/21
2. Another week of leadership battles. The Equal Weight S&P 500 Index and 7 of 11 sectors hit new highs last week:
Source: The Chart Store, from 4/26/21
3. Are the markets getting ahead of themselves? Is U.S. large-cap leadership getting long in the tooth?
Source: The Chart Store, from 4/26/21
4. While the Boomer prod is fun, this is scary. Don’t confuse speed with magnitude! Every time there is a claim “but this time it is different”, the markets prove otherwise…
Source: The Daily Shot, from 4/26/21
5. The spread between junk and Treasuries is now lower than it was during the most tranquil market of 2017/18…
Source: The Chart Store, from 4/26/21
6. European manufacturing is strong like in the U.S., but Services is still struggling due to a new Covid wave:
Source: The Daily Shot, from 4/26/21
7. If you feel lonely, you are not alone:
Source: The Daily Shot, from 4/26/21
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.