MARKET RECAP

The first quarter closed on Thursday. US stocks registered a 6.5% advance followed by international stocks at 4.5%. US bonds fell by 3.6% due to the fast run-up in interest rates. The yield on the 10-year treasury increased by 81 basis points or 89% during the quarter. Bitcoin just about doubled. High-interest rates, and more acceptance of bitcoin as an alternative to gold, impacted the yellow metal, which fell by 10.3%. The commodity oil was the leader for the second quarter in a row, up by 22.3%.

The economy received excellent news on the job front as hiring surged in March. Job increased by 916,000 during the month and the unemployment rate fell to 6%. Infections have turned slightly up in the last couple of weeks, but they are way down for a few months ago, and as more and more Americans get vaccinated, consumer confidence is increasing with the feeling that the end of the pandemic is near. The surging jobs numbers, along with positive momentum in the economy, reenforced the question of the need for the recent $1.9 trillion stimulus bill.

Biden announced the first part of his $2.3 trillion infrastructure plan, to be spent over 10-years. It includes $600 billion for traditional infrastructure projects like roads and bridges. Then there is $374 billion for broadband access, modernizing the electric grid, clean energy, and electric vehicles. $480 billion for manufacturing and research and development. And $500 billion for caregivers and workforce development. The plan would be financed by higher corporate taxes and Biden claims the plan would pay for itself within 15-years.

Hedge fund Archego imploded this week. The fund had $10 billion under management but market exposure of $30 to $100 billion. The fund was brought down by excessive leverage and concentrated positions.

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