Benchmarks Bounce Back on Additional Covid-19 Relief

Bond yields retreated for most of the week, as well

Digital Content Manager
Mar 12, 2021 at 2:48 PM
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Stocks staged an impressive comeback this week, as investors celebrated Covid-19 stimulus and retreating bond yields. Things were off to a good start right off the bat on Monday, after U.S. President Joe Biden's $1.9 trillion rescue package got the Senate's blessing, clearing the path for direct payments to millions of Americans, unemployment benefits, and aid to state and local governments. In response, the Dow notched a brand new intraday high. Optimism remained into Tuesday, as bond yields pulled back and sent investors rushing back towards the tech sector. That helped the Nasdaq score its best day since November, and pushed the Dow to another intraday record as well.

Investors were still riding the stimulus and lower bond yields wave on Wednesday, with President Biden promising the $1,400 stimulus checks would start going out this month. It is no surprise, then, that Wall Street's "fear gauge" -- the Cboe Volatility Index (VIX) -- fell to its lowest point in two weeks. Thursday brought on even more tailwinds, with the President signing the Covid-19 relief bill earlier than expected, pushing the Dow and S&P 500 to record closes. However, a rise in the 10-year Treasury yield kept further gains in check on Friday, though the Dow still cruised toward a record close and its sixth-straight gain. At last check, all three major benchmarks were on track for weekly wins.

Tech Sector Makes Major Moves

The tech segment was front and center this week. Newly listed Bumble (BMBL), for one, was buzzing with fresh analyst coverage, while calls were running at double the typical amount in the options pits. Meanwhile, cybersecurity name McAfee (MCFE) soared after announcing the $4 billion sale of its profitable enterprise business to a consortium led by Symphony Technology Group. And though Digital Turbine (APPS) fell, it flashed a bullish signal that could be indicative of a comeback. Similarly, blue-chip concern Microsoft (MSFT) pulled back, after news that thousands of its customers were hacked. 

China-based search engine giant Baidu (BIDU) surged, however, after the company got the green light to list its shares on the Hong Kong Stock Exchange (HKEX). Blackberry (BB) was also in focus, even weeks after its Reddit-fueled trading frenzy. In terms of earnings, Oracle (ORCL) attracted a slew of bull notes thanks to a fiscal third-quarter earnings and revenue beat. And speaking of China-based stocks, Alibaba (BABA) made headlines once again, due to potentially record-breaking regulatory fines.

Retail Stocks Take the Spotlight

Several major retail names were in the spotlight this week, too. VF Corp (VF), the parent of brands including The North Face and Timberland, was higher after a Pivotal Research bull note. Stitch Fix (SFIX), on the other hand, drew mixed reactions from analysts due to a lackluster fiscal second-quarter earnings report. Express (EXPR) had a significantly better trip to the confessional, surging after crushing fourth-quarter earnings and sales estimates. And while Bed Bath & Beyond (BBBY) struggled, it pulled back to a bullish trendline. Party City (PRTY) was not as lucky, falling after a fourth-quarter earnings missFinally, newbie Poshmark (POSH) tumbled down the charts due to a dismal forecast.

All Eyes on Fed Interest Rate Decision Next Week

The incoming week brings a deluge of economic data for investors to digest, including retail sales data, the import price index, and another round of jobless claims. Wall Street will also be focused on the Federal Reserve's latest interest rate decision. In terms of earnings, the calendar looks relatively bare, though major names such as Nike (NKE) and FedEx (FDX) are still set to report. You can get ahead of next week's events right now by learning what to expect after a Nasdaq correctionand uncovering why big-caps stocks may undergo further selling pressure.

 

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