Stocks were generally higher this week as investors digested earnings and economic data. JPMorgan and Goldman Sachs kicked off earnings season this week with both institutions reporting strong earnings for the first quarter. As global stocks trade near all-time highs, markets are looking to the earnings season for further confirmation of a strong profit rebound. In addition, investors are monitoring vaccine developments and keeping an eye out for signs of rising inflation.  On that note, import and export prices were reported this week, both well above consensus. While generally not a market mover, changes in import and export prices are a valuable gauge of inflation both domestically and abroad. The bond market is especially sensitive to the risk of importing inflation because it erodes the value of the principal which is paid back when the bond matures. It also decreases the value of the stream of coupon payments on bonds.  Import and export price data has been trending upward over the past year and is worth keeping an eye on.  In other economic data, initial claims, industrial production, and retail sales numbers will be reported towards the end of the week.  In the commodities markets, oil prices continued to climb higher, reaching $63 per barrel of WTI Crude Oil. Interest rates remained range-bound, with the yield on the 10-year Treasury note trading around 1.64% mid-week.

Source: GSAM, CNBC, JPM, Bloomberg, FactorInvestor

 

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