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Chart Title	Date
A good-looking chart	6/11/2021
While gas prices rise, metals cool	6/4/2021
Corporate lobbying on trade	5/28/2021
Gold lost its luster?	5/21/2021
Buyback resurgence	5/14/2021
Estimated sales growth rates by sector	5/7/2021
Corporate executives and working from home	4/30/2021
Consumer, financial stocks in focus	4/23/2021
International to outpace US?	4/16/2021
Confidence rises	4/9/2021
Inflation not a problem yet?	4/2/2021
Rates rise	3/26/2021
Dollar decline and sectors	3/19/2021
US inflation heats up	3/12/2021
Rates rattle markets	3/5/2021
Sectors and rising rates	2/26/2021

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A good-looking chart

The chart below reveals how stocks—as measured by the S&P 500—have performed well in years where the index has gained between 10% and 15% through the first 5 months of the year. Indeed, since 1950 the S&P 500 has added at least 6% in the 10 instances where this has occurred. Past performance doesn't guarantee future results, but this could portend positively for investors for the remainder of 2021.

Source: Bloomberg, as of June 5, 2021.

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While gas prices rise, metals cool

The US national average gas price has climbed above $3 per gallon on average in the US for the first time since 2014, causing some consternation. And while commodity prices have broadly been rising during the pandemic, other commodities—such as metals—have been trending lower over the past several weeks. The recent decline in prices for metals like steel rebar, iron ore, and copper has been in response, in large part, to China (the world's largest consumer of industrial metals) attempting to help clamp down on surging prices by pledging to manage stockpiles, reinforce inspections on spot and futures markets, and shut down domestic mills that price gouge or collude.

Source: Bloomberg, as of May 30, 2021.

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Corporate lobbying on trade

Before COVID-19 struck, trade was one of the dominant factors moving markets. Obviously, the pandemic pushed everything else to the background, but trade has not faded entirely from the landscape—particularly from the perspective of corporations. US companies remain concerned about trade and tariffs, especially in regard to China. The chart below shows the percentage of S&P 500 companies lobbying on trade issues in Q1 of 2021 were greatest for general trade issues and supply chain issues. Concerns over the latter may have been exacerbated by COVID-19, which highlighted supply chain vulnerabilities and US reliance on foreign suppliers.

Source: Strategas, as of May 23, 2021.

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Gold lost its luster?

The arrival of cryptocurrencies appears to have diminished gold's shine in the financial news media headlines. Checking in on the precious metal, it is off the all-time high above $2,000 per troy ounce set shortly after the COVID-19 pandemic’s outbreak, yet it remains within striking distance of historic highs. With that said, many investors expected gold prices to shine more brightly amid some hot inflation data of late. This has left investors wondering if gold may react to a greater extent to changes in demand for the metal, real interest rates, geopolitical risks, and other factors.

Source: FactSet, as of May 17, 2021.

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Buyback resurgence

Buyback announcements fell off a cliff in the months following the COVID-19 pandemic outbreak. But they have steadily recovered as business conditions have slowly improved. The chart below depicts the number of companies announcing buybacks on US exchanges since the beginning of 2020. More buyback announcements have been made in every quarter since the second quarter (Q2) of 2020, and the first quarter (Q1) of 2021 marked the highest number since the pandemic began. More recently, April got Q2 of 2021 off to a strong start, with 97 companies announcing stock repurchases thus far.

Source: Strategas, as of May 10, 2021.

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Estimated sales growth rates by sector

Expected sales growth this year varies dramatically by sector. Leading the pack, consumer discretionary and materials sales growth is forecasted to grow 17.7% and 17.1%, respectively, while financials and real estate are forecasted to see a negative growth rate. Looking further out, expected 3-year compound annual growth rates (CAGR) for the 2020-2022 period is positive across sectors. Of note, only real estate is expected to see accelerating sequential growth through next year.

Source: Strategas, as of May 2, 2021. Est. = Estimates

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Corporate executives and working from home

According to a survey from the American Institute of CPAs, more corporate executives are considering reducing office space in the future relative to data from Q3 in 2020. The percent of respondents planning to reduce office space to some extent increased from 17% to 20%. There was a 2% increase in respondents that want to grow their office space. While 72% reported no plans to grow or reduce existing office space, diminishing demand might be a problematic headwind for commercial real estate investments.

Source: American Institute of CPAs, Strategas, as of April 23, 2021. Survey sample = 693 respondents.

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Consumer, financial stocks in focus

With earnings season underway, expectations are high for most sectors due to extremely favorable comparables to the same period last year—when COVID-19 took hold of the global economy. In particular, consumer discretionary stocks are expected to see a nearly 100% surge in year-over-year earnings per share (EPS) growth, financials are expected to soar 76%, and materials are expected to grow 45%. Only the industrials and energy sectors are forecasted to contract year-over-year. However, stock prices are unlikely to match Q1 earnings performance, as much of the earnings bounceback may be priced into stocks already.

Source: Refinitiv, as of April 17, 2021.

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International to outpace US?

The 2021 full-year consensus earnings growth estimate for the MSCI EAFE—which represents large- and mid-cap stocks for 21 developed markets across the globe, excluding the US and Canada—is currently 35%. That tops the S&P 500’s 25% expected year-over-year growth rate. Looking ahead to 2022, expected earnings growth for the MSCI EAFE and the S&P 500 are closer.

Source: Strategas, as of April 9, 2021.

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Confidence rises

While it is still well below pre-COVID-19 levels, consumer confidence continues to rebound from multi-year lows. A combination of the ongoing reopening efforts across the globe and vaccination distributions, plus additional government spending proposals and continued central bank support have helped boost consumer confidence. The Conference Board’s Consumer Confidence Index surged to 109.7 in March, the highest level in roughly a year. Given that the US economy relies overwhelmingly on consumer spending, strengthening consumer confidence can be a bullish indicator for the market.

Source: The Conference Board, as of April 3, 2021.

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Inflation not a problem yet?

Many investors worry about inflation, and for good reason. Inflation can eat at your overall returns. But according to analysis from UBS, inflation is not at levels that would be deemed a problem yet. The chart below shows the US 10-year breakeven (a proxy for inflation), along with the levels at which UBS thinks it would become worrying for the S&P 500, US value stocks, European value stocks, and emerging market stocks.

Source: Bloomberg, UBS, as of March 28, 2021.

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Rates rise

The 10-year US Treasury yield recently jumped above 1.7% (a 14-month high), and the 30-year US Treasury yield rose near 2.5% (surpassing 2020 highs), as US rates continue to broadly climb. Some investors attributed a portion of the recent spike to the Fed’s decision to decline extending a rule due to expire at the end of March that relaxed supplementary leverage ratios for banks during the pandemic.

Source: Bloomberg, as of March 20, 2021.

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Dollar decline and sectors

Around the 1-year anniversary of the COVID-19 pandemic unfolding in the US, a chart of the US dollar index shows the greenback has been in a steady decline since March 2020. The value of a currency, relative to other currencies, can impact the bottom line of companies with global exposure. A weakening dollar would have a positive effect on the foreign revenues of a US-based company. Among the 11 S&P 500 sectors, technology and materials have the most foreign revenue exposure as a percent of their overall revenues.

Source: Strategas, as of March 14, 2021.

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US inflation heats up

As COVID-19 continues to linger over the economy, a new threat to US stocks may be emerging: inflation. Stocks declined after Federal Reserve Chairman Jerome Powell suggested inflation could rise if and when the economy opens up further. "For several decades, the US and world economy has been in a low-inflation world,” Powell noted. But among G7 countries (the 7 largest developed economies in the world), the US has the highest year-over-year inflation rate and is approaching the Fed’s 2% long-term target inflation rate.

Source: FactSet, as of March 7, 2021.

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Sectors and rising rates

While it is no sure thing that interest rates will continue to rise, they are up substantially in recent months: The 10-year US yield has climbed nearly 1% since the near-term nadir in August 2020. Looking at the 7 most recent periods of rising rates, technology, consumer discretionary, and materials stocks have had the best percentage gains on average.

Source: Strategas, as of February 19, 2021.