All three major market indexes had weekly gains last week, with the major banks driving a good start to the first quarter earnings season. Investors appear to be focusing on the economic recovery despite mounting concerns about new COVID-19 variants, while many of the tech and growth stocks that have long been market favorites showed a resurgence in price and sentiment. 

Vaccine progress hit a speed bump as the Johnson & Johnson vaccine was linked to blood clot cases, and the CDC recommended to pause use. However, Dr. Fauci predicted the vaccine will be back by Friday with restrictions and warnings. Right now, half of the United States’ population have received at least one shot, and we are still on pace for 75% of the population to be fully vaccinated in 3 months.  

We are seeing that spending from the March stimulus payments is already reaching parts of the economy that have lagged for the past year.  Despite the J & J vaccine troubles, the vaccine rollout is progressing and that allows for the return of the kind of spending and the kind of jobs that require social interaction such as entertainment, lodging and dining.      

Coming up to the on deck circle this week are earnings from a wide group of Corporate America, including AT&T, Coca-Cola, IBM, J&J, Netflix and Lockheed Martin. Just one week into the season, companies are already beating estimates by a wide margin of more than 84%, according to FactSet, which projects Q1 earnings growth will surge 24% from a year earlier. Attention this time around will also center on margins. Those will determine whether rising costs are pressuring profits or suggest a buildup of inflation or reflation in the economy, but it could also signal whether supply chain shortages are affecting companies' bottom lines. The impacts from the reopening are also likely to show up in reports, while stock buybacks are set to jump with many U.S. corporations sitting on large amounts of cash.

Last week Coinbase (COIN) went public via a direct listing, which was viewed as monumental for the crypto industry. Coinbase is a cryptocurrency exchange platform and is valued near $70B, which is larger than the New York Stock Exchange. After COIN went public, Bitcoin, Ethereum, and Dogecoin hit all-time highs. There is reasonable skepticism that a cryptocurrency created after a “meme” (Dogecoin) rising 450% in a week may indicate a crypto-bubble.  While we have trouble calling these various crypto issues “currency” because of their tremendous volatility, we will continue to monitor the increase in usage and acceptance.