Commonwealth

One of the big surprises over the past couple of weeks has been the strength of corporate earnings for the first quarter. As of the end of last week, according to FactSet, seven of eight companies (about 440 companies or 88 percent) had reported. Of these 440 companies, about 385 (86 percent) beat expected earnings. These are the highest levels of beats on earnings seen since the start of records in 2008.

Last week saw a number of important economic updates, with a focus on business confidence in April and the recent jobs reports. The April employment report showed a slowdown in the number of new jobs added, but weekly unemployment claims fell to a new pandemic-era low by the end of the month. This will be another busy week, with updates to come on April’s inflation, retail sales, and industrial production, as well as a first look at consumer confidence in May.

India is in the midst of a brutal second wave of COVID-19, with the situation continuing to deteriorate by the day. While the human toll is massive, the economic impact is also not insignificant. At the start of 2021, India was expected to be one of the fastest-growing major economies in the world. Now, it is expected to succumb to a massive economic shock.

Last week was relatively quiet on the economic update front, with only three major data releases. The weekly initial jobless claims and new home sales reports served as highlights. This week will be busier, with reports on first-quarter GDP growth, durable goods orders, and personal income and spending.

The 10-year Treasury yield has been climbing steadily since hitting a low of 0.5 percent in August 2020. This week, as of April 20, it was close to 1.56 percent. But the rise in rates hasn’t been equal across the broad spectrum of fixed income instruments. If you’re an investor who hasn’t made any changes to your fixed income portfolio since last August, it’s likely your exposures have changed. As a result, your investments may not be delivering the benefits you’re looking for. To assess the situation, take a look under the hood at your fixed income portfolio. But first you need to understand what current interest rates are telling us—and how inflation is involved.

I spent last week down in the Florida Keys on vacation with my family. It was great. The weather was terrific, we went snorkeling and kayaking, and the place we stayed was very nice. Truly relaxing.