Week in Review

Week-in-Review: Week ending in 07.09.21

July 12, 2021

The Bottom Line

● U.S. equities advanced for the third week in a row and sixth in the last seven. Major U.S. indices closed at record highs, overcoming a big drop on Thursday over fears of the spreading Delta variant and slowing global growth.
● Despite a +7 basis point rally on Friday, the yield on the 10‐year U.S. Treasury dropped ‐6basis points forthe week, closing at 1.36%. At its lowest point on Thursday the 10‐year was down near 1.25%.
● The Labor Department reported that May job openings rose by +16,000, pushing the total to a new record high of 9.2 million jobs, which nearly matches the 9.3 million unemployed Americans that are actively seeking jobs.

2021✔️Friday✔️Record Highs✔️

In what seems to have become a regular occurrence in 2021, major U.S. indices set fresh all‐time highs on Friday, capping an otherwise wobbly week. It took a big rally on Friday to overcome Thursday’s losses over fears of the Delta COVID variant spreading and worries that global growth was peaking. It was the third straight weekly gain for the S&P 500 and the sixth week of gains in the last seven. The Dow Jones Industrial Average and Nasdaq Composite also finished at record highs. Though small caps fell short of record highs, falling ‐1.1% for the week, the Russell 2000 did rebound+2.0% on Friday. The Friday stock rally was spurred by news that Pfizer is working on a booster shot to combat the Delta variant and China’s central bank was boosting liquidity by reducing the amount of cash its banks must hold in reserve. The yield on 10‐year U.S. Treasury has fallen for two consecutive weeks, and fell as low as 1.25% on Thursday, but reversed noticeably on Friday. The 10‐year Treasury yield rose 7 basis points Friday to close at 1.36%. Economic news was relatively quiet during the week and markets appeared to shrug an executive order by President Joe Biden’s to crack down on anticompetitive practices among U.S. businesses.

Digits & Did You Knows

CANCER — The diagnoses of some forms of cancer fell by more than ‐50% in 2020 when compared to 2019, not because cancer is on the decline but because 94% of Americans postponed their annual screenings and many cancer clinics suspended the collection of biopsies (source: Propublica, BTN Research).
REAL ESTATE — In March 2020 1.49 million existing homes were on the market for sale. By March 2021, just 1.05 million homes were on the market. With a smaller supply, home prices soared. The median sales price of existing homes sold rose from $280,700 in March 2020 to $350,300 in May 2021, a +25% increase (source: Nat’l Association of Realtors, BTN).

 

 

 

 

 

 



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Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”).

© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

Week in Review

Week-in-Review: Week ending in 07.02.21

July 6, 2021

The Bottom Line

● U.S. equities reached more record highs after seven straight gains, it best winning streak in 10 months. It was the second straight week of gains for the S&P 500, which is now up in five of the last six weeks.
● The yield on the 10‐year U.S. Treasury dropped 10 basis points, closing at 1.42%. Meanwhile, the price of a barrel of West Texas Intermediate crude oil rose above $75, hitting its highest level since 2018.
● Economic data continued to suggest solid expansion, with strong manufacturing and consumer confidence reports, as well as solid June jobs data that come in higher than expected, but with moderate wage gains.

Stocks rebound from last week’s fall

The S&P 500 posted another solid week of gains with seven consecutive winning sessions, its longest winning streak since August. For the week, the S&P 500 climbed +1.7% and the tech‐heavy Nasdaq Composite rose nearly +2%. The S&P 500 has now risen in five of the past six weeks, while the Nasdaq has gained in six of the past seven weeks. One weak spot for equities was small caps, as the Russell 2000 Index fell ‐1.2%for the week. The price of a barrel of West Texas Intermediate crude oil rose above $75, hitting its highest level since 2018. Signs of solid economic growth continued with June U.S. manufacturing activity from both ISM and Markit coming in at historically high levels and well into expansion territory. Several major banks announced plans to return capital to shareholders in the form of increased dividends and share buybacks following last week’s successful stress test of the sector by the Fed. But the market was particularly enthused by a solid employment report for June that was released on Friday. June nonfarm payrolls easily topped economists forecast. Factory orders also topped estimates and consumer confidence hit its highest level since February 2020, before the pandemic.

Digits & Did You Knows

FEWER BABIES — Despite a year of lockdowns with our spouses/partners, the number of US births fell in 2020 to 3.6 million, the 12th decline in the last 13 years (source: CDC).
TRAVEL — When travel for vacations slowed in the summer of 2020, rental car companies sold off more than 500,000 rental cars just to survive, leading to a shortage of rental cars and higher prices in 2021 (source: CNN, BTN Research).
(POOL) HELP WANTED — U.S. cities don’t have enough lifeguards, e.g., Austin, TX is short 80% of its 750‐lifeguard goal for the summer of 2021. The pandemic shutdown put a freeze on training and certification programs for lifeguards (source: American Lifeguard Association, BTN Research).

Click here to see the full review.

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Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”).

© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

Month in Review

Month-in-Review: June 2021

July 6, 2021


Quick Takes

● Global recovery lifts all boats. International bonds and stocks fell in June, but all major asset classes were up in Q2 as the global synchronized recovery continued. Economic activity is expansionary globally and earnings are improving globally.
● Dollar dependent. The direction of the U.S. dollar (USD) has historically been a key contributor to international asset’s performance. In May USD weakness led to international stock and bond outperformance, but in June USD strength led to international assets underperforming.
● The U.S. continues to lead the way. Whether it’s the economy, earnings or markets, the U.S. continues to lead the global recovery. June capped the fifth straight positive month for U.S. stocks and the fifth straight positive quarter, the best streak since 2017.
● Inflation and variants are keys to the outlook. Two of the biggest issues that will shape market and economic behavior in the second half of 2021 are 1) whether inflation is “transitory” or not, and 2) whether vaccinations can mitigate new COVID-19 variants sufficiently to avoid further restrictions.

Asset Class Performance

In a counter trend move from May, June saw the U.S. dollar jump 2.9% and that contributed to international equities and bonds being the only broad asset classes to drop in June. But for the second quarter all asset classes gained.

Stocks sail to records behind vaccinations & improving economies

Stocks closed out June, the second quarter, and the first half of the year with the S&P 500 hitting 4,297.50, an all-time high. It was the fifth consecutive month and the fifth consecutive quarter of positive returns for the S&P. That’s the longest quarterly streak since a nine-quarter stretch that lasted through 2017. And the performance of those five quarters has ranged from +6.2% to +20.5%. Research from Bespoke Investment Group shows that the only other time the S&P 500 has had at least five straight quarters of more than +5% gains was in the mid-1950s – and the following year its was up another +25%. Numerous tailwinds are behind the strong stock performance, with vaccination rates improving, economic activity solidly expanding, and earnings accelerating. More than 325 million COVID-19 vaccinations have been administered in the U.S. with now more than 57%of U.S. adults now vaccinated. Importantly, 90% of the 65+ age group, a cohort that represents over 80% of COVID-19 deaths, are 90% vaccinated. As a result deaths are down -93% from their January peak, a new pandemic low. Meanwhile vaccination campaigns continued to accelerate overseas with Europe now catching up with the U.S. and U.K. With economies opening robust demand for consumer goods has resulted in strong manufacturing activity and as COVID restrictions are lifted services activity is accelerating from consumers that are flush with cash from savings, stimulus checks, and expanded unemployment insurance programs. Earnings for the second quarter will start being reported in the next few weeks and they have a high hurdle after Q1 which was the best quarterly year-over-year earnings growth since Q1 of 2010. J.P. Morgan is forecasting an earnings surprise of +14.6% for S&P 500 companies for the second quarter. That’s lower than the last four quarters but still well above the long-run average of 7%. Moreover, Bespoke Investment Group notes that since June began stocks have reacted more positively to earnings reports than in Q1. For multi-asset class investors, the good news didn’t end with equities. The Bloomberg Barclays US Aggregate Index was up+0.7% in June and +1.8% for the quarter – its eleventh gain over the last twelve quarters and its best quarter since the depths of the pandemic in 2Q-2020. Investment Grade bonds id even better in June, rising 1.6% and +3.5% for the quarter. Bonds benefitted from narrowing yield spreads and declining Treasury yields. Yields on 10-Year U.S. Treasury fell -13 basis points in June and -27 basis points over the quarter, to their lowest levels, 1.47%, since early March. Commodities also continue to work, gaining +1.8 in June and +13.3% for the quarter, the best quarter since Q4-2010, and the sixth positive quarter in the last seven. They’ve benefitted from a U.S. dollar that has declined in four of the last five quarters, though the buck bucked the trend in June, rising +2.9%.

Bottom Line: The bull market is now in its second year and positive trends on the vaccination, earnings and economic fronts are supportive of the breakout to new highs. An accommodative Fed should also continue to help support equities, even at stretched valuations.

 

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©2021 Prime Capital Investment Advisors, LLC. The views and information contained herein are (1) for informational purposes only, (2) are not to be taken as a recommendation to buy or sell any investment, and (3) should not be construed or acted upon as individualized investment advice. The information contained herein was obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Investing involves risk. Investors should be prepared to bear loss, including total loss of principal. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Past performance is no guarantee of comparable future results.

Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a
Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management
(“PCWM”) and Qualified Plan Advisors (“QPA”).
© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

Financial Planning

Inflation: Transitory, Sustained, or Runaway?

June 29, 2021

The buzz word of the year in the financial industry has without a doubt been “transitory.” This is the label that Federal Reserve Chairman, Jerome Powell, Treasury Secretary, Janet Yellen, and many leading economists have placed upon the recent surge in inflationary pressure sweeping across the country. While inflation has been somewhat dormant coming out of the financial crisis in ’08-’09, it’s been painfully visible for anyone who has tried to build a deck, buy a used car, or hire new employees in recent months. Inflation can also have major implications for financial markets, as analysts and investors obsess over every word from the Federal Reserve trying to understand exactly when this unprecedented level of “easy” monetary policy will start winding down.

The argument from those in the “transitory” camp would suggest that this bump in prices was inevitable due to the massive disruption in the supply chain from the COVID-related shutdowns, coupled with a surge in demand from consumers as the economy springs back to life. The Federal Reserve sagely began preparing for this scenario almost a year ago, when they shifted their “inflation control” policy to seek an average rate of 2% over the long run, rather than a fixed target, giving themselves the flexibility to keep policy loose (interest rates low) even if inflations should spike for a few months or even a few years.

Those that fear runaway inflation would argue that this new approach could be dangerous. They are concerned that the massive amount of stimulus money sent directly to consumers in the last 12 months, funded by an ever-increasing mountain of debt, will cause prices to spin out of control. The consequence of this, they fear, would be a need for a more drastic movement upward in interest rates, as was seen in the 1980’s. This could indeed cause a severe recession and potentially a sharp decline in real estate prices as affordability would drop overnight.

So which side is correct? We will take a deeper dive into this topic in our quarterly newsletter, but in short, we fall somewhere in the middle. We’ve already seen evidence of cooling in some of the hottest commodities from a few months ago (lumber, copper, etc.). But it’s quite possible that other areas that have seen price increases, such as the cost of labor, might be more sustained. This “elevated” but not “runaway” level of inflation shouldn’t spell disaster for investors, but does require careful consideration in the portfolio construction process. As I mentioned above, stay tuned for more on this topic in the coming weeks, but please don’t hesitate to reach out to our team if you would like to discuss your personal thoughts and concerns in more detail.

 

Week in Review

Week-in-Review: Week ending in 06.25.21

June 28, 2021

The Bottom Line

● Trading remains choppy but volatility dropped as stocks rallied to new record highs and rebounded nicely from last week’s pullback. Gains were broad based with both U.S. and overseas stocks rising across styles and sectors.
● The yield on the 10‐year U.S. Treasury turned higher this week, following Fed Chair Powell’s dovish Capitol Hill testimony, in contrast to the Fed’s hawkish tone the prior week. As a result, the yield curve returned to steepening.
● Economic data continued to suggest solid expansion with stronger than expected growth in the preliminary June manufacturing and services purchase managers indices which hit a new record high of 62.6.

Stocks rebound from last week’s fall

Stocks posted solid weekly gains and set more fresh record highs along the way. The S&P 500 finished at an all‐time high on Friday, capping its best week since February with a +2.7%advance to rebound from last week’s Federal Reserve‐induced pullback. The giant cap Dow Jones Industrial Average rose +3.4%, the small cap Russell 2000 Index popped +4.3%, and the tech‐heavy Nasdaq Composite climbed +2.4%, after hitting an all‐time high on Thursday. As stocks rallied, Treasuries were choppy after last week’s hawkish monetary policy comments by the Fed, while Fed Chairman Jerome Powell was more dovish this week in his Congressional testimony stating the central bank sees no risk of runaway inflation and will support the economy for as long as it takes to complete its recovery. The yield on the 10‐year note rose +8 basis points (bps) over the week to 1.52%. The Treasury yield curve steepened after last week’s unexpected flattening. On Thursday a group of bipartisan Senators and President Biden agreed on a nearly $1 trillion spending package over five years for core infrastructure projects such as roads, bridges, and mass transit. Economic data continues to suggest solid expansion.

Digits & Did You Knows

STOCKS AND INFLATION — In the last 70 years (1951‐2020), inflation as measured by the Consumer Price Index (CPI) has been at least +5% in 12 different years, most recently in 1990. The total return for the S&P 500 has been split over those 12 high‐inflation years, rising in 6 and falling in 6. The average total return for the S&P 500 over all 12 years is just+3.2% (source: BTN Research).
FEWER CHOICES — There were 1.16 million existing homes for sale in the U.S. as of 4/30/21, up a bit from the 1.03 million for sale as of 2/28/21, which was the lowest level ever reported for data tracked since 1999 (source: National Association of Realtors, BTN Research).

Click here to see the full review.

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Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”).

© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

Week in Review

Week-in-Review: Week ending in 06.18.21

June 24, 2021

The Bottom Line

  • Equities finished another volatile week solidly lower, with the S&P 500 dropping ‐1.9%. After leading large caps for three consecutive weeks, the small cap Russell 2000 fell sharply, losing ‐4.2% for the week.
  • The yield on the 10‐year U.S. Treasury was little changed, down‐1 basis point, but that masked some big swings in the bond market. Following a surprisingly hawkish tone by the Fed, short yields doubled and long yields fell.
  • Homebuilder confidence remains historically high, but it has been dropping lately and now building permits are falling too. Meanwhile May retail sales were softer than expected and unemployment claims unexpectedly rose.

Stocks battered, yield curve flatter
Global equities finished another volatile week solidly lower, as the U.S. Federal Reserve surprised markets by forecasting earlier‐than‐expected rate hikes and indicated it will discuss tapering asset purchases in coming meetings. The Federal Open Market Committee (FOMC) is now forecasting that it will hike rates twice in 2023 after previously predicting no hikes until 2024. Comments from St. Louis Fed President James Bullard—a non‐voting member this year—added to the Fed’s hawkish tenor with his comments Friday morning. The so called “reflation trade”, which favored value stocks and commodities, came under immediate pressure following the FOMC shift. The bond market also saw significant swings this week as the Treasury yield curve flattened noticeably, with the yield on the 2‐year note almost doubling and longer‐term yields, such as the 30‐year bond, falling (the 30‐ year US Treasury yield plunged ‐16 basis points on Thursday alone). The U.S. Dollar Index rallied to levels not seen since April. Economic data didn’t help as May retail sales came in softer than expected, manufacturing growth in New York and Philadelphia slowed, jobless claims snapped a string of weekly declines, and producer inflation ran hot.

Digits & Did You Knows
SLIGHTLY USED — The average age of vehicles on U.S. roads last year was 12.1 years, a record high. The average has been rising steadily for 15 years as car quality has improved, but the pandemic accelerated the trend (source: Dow Jones).
LEAVING TOWN — Between 7/01/19 and 6/30/20, 5 of the 10 largest cities in the U.S. saw their populations decline – New York City, Los Angeles, Chicago, Philadelphia and San Jose (source: Census Bureau, BTN Research).
SPENDING — Americans imported $278 billion of foreign goods and services in March 2021 and $274 billion of imports in April 2021, the 2 highest months in U.S. history (source: Bureau of Econ. Analysis, BTN Research).

 

 

 

 

 

 

 

Click here to see the full review.
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Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid-CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4% Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.
Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”).

© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

Month in Review

Month-in-Review: May 2021

June 9, 2021

Quick Takes

● Heavyweight bout. Much of May was a battle between rising inflation fears and growing optimism from the U.S. economic recovery. Overall, though, the data points to an economy, and corporate earnings picture, that remains in an upswing.
● All’s well that ends well? There were no corrections in May, but trading was choppy. In both the second and third weeks of the month the S&P 500 traded more than ‐4% below the May 7th all‐time high, yet closed May just ‐0.7% off the record. In 11 of May’s 20 trading days, VIX was above 20 but ended at 16.8.
● Everybody’s still a winner. For the second straight month all major asset classes had positive returns, although May’s gains were more modest. Both U.S. and developed international equities are up double digits in 2021, and U.S. real estate is up +18.1%.
● Fixed income was flat. Bonds rose in May, but just barely. The best performers were Treasury‐inflation protected securities (TIPS) and investment‐grade bonds. After a rapid rise in Q1, the 10‐year Treasury yield spent April and May almost entirely in a range between 1.5% and 1.75%, closing May at 1.58%.

Asset Class Performance

May was defined by positive, yet modest, gains for all major asset classes. International developed and emerging market equities led in May. International bonds also finished ahead of U.S. bonds as the U.S. dollar fell further.

Vaccinations & Improving Economy Have Investors Smiling

COVID‐19 trends continue to make material improvements on virtually all fronts. The U.S. has administered over 295 million vaccines, with more than 40% of the population now fully vaccinated. The 7‐day average of new positive cases has declined to the lowest levels since the start of the pandemic and are now down ‐94% from their January highs. The 7‐day average of deaths per day is now under 400, ‐88% from their January highs. The percentage of positive COVID‐19 tests in the U.S. fell below 2% for the first time, a new pandemic low. With all the progress on the vaccination and COVID‐19 case fronts states and businesses began to fully reopen. That has resulted in a U.S. economic recovery unlike any in recent history. Consumers have trillions in extra savings and stimulus funds, banks have amassed capital, business are eager to hire and restock inventories, and new businesses are being established at the fastest pace on record. That all has investors in an optimistic mood. Rather than “Sell in May and Go Away”, investors sent the S&P 500 to new all‐time highs on May 7th while the Cboe VIX volatility index fell to 16.7, near its lowest levels since early 2020. But the remainder of May was a battle between the bulls and bears as the speed of the recovery led to bouts of inflationary scares and shortages of goods, raw materials, and workers. Private sector wages and salaries are up a staggering +19.4%in the past year and are now +5.5% above pre‐COVID levels. Consumer spending was the biggest driver of real GDP growth in Q1, including spending increases for motor vehicles and parts that increased +66.2%, durable goods that rose +48.7%, and food services and accommodations

that jumped +26.6%. Gains like those, even off the extraordinarily low bases from the depths of last year’s COVID lockdowns, are bound to create inflation concerns. U.S. stocks pulled back more than ‐4% from the May 7th all‐time highs in both the second and third weeks of the month, and VIX volatility spiked to about 28 and 26 on each of those declines. But in the end the bulls took the victory as investors pushed aside the inflation fears in favor of recovery optimism. The S&P 500 rose +0.7% to post its fourth consecutive positive month, and sixth of the past seven. The small‐cap Russell 2000 index, which is more leveraged to the economic reopening, posted its eighth straight positive month for the first time since 1995.

Importantly, vaccination rates in Europe have picked up after a relatively slow start. That has helped Eurozone economic sentiment improve for four straight months and hit its highest level since 2018.The COVID crisis in India has also made much needed progress with over 190 million vaccines so far administered–only behind the totals of US and China. As a result, those economies are also rebounding nicely. As seen in the chart above, both developed and emerging international PMIs are rising and are well into expansion levels (above 50). The MSCI EAFE Index gained +3.3% in May, outperforming U.S. stocks for the first time in 2021.

Bottom Line: Global equities rallied for the sixth time in seven months as vaccinations helped accelerate the recovery for most countries. Ongoing fiscal stimulus and improving earnings also boosted investor confidence.

Click here to see the full review.

 

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©2021 Prime Capital Investment Advisors, LLC. The views and information contained herein are (1) for informational purposes only, (2) are not to be taken as a recommendation to buy or sell any investment, and (3) should not be construed or acted upon as individualized investment advice. The information contained herein was obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Investing involves risk. Investors should be prepared to bear loss, including total loss of principal. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Past performance is no guarantee of comparable future results.

Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a
Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management
(“PCWM”) and Qualified Plan Advisors (“QPA”).
© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

COVID-19 Week in Review

Month-in-Review: May 2021

June 4, 2021

Quick Takes

● Heavyweight bout. Much of May was a battle between rising inflation fears and growing optimism from the U.S. economic recovery. Overall, though, the data points to an economy, and corporate earnings picture, that remains in an upswing.
● All’s well that ends well? There were no corrections in May, but trading was choppy. In both the second and third weeks of the month the S&P 500 traded more than ‐4% below the May 7th all‐time high, yet closed May just ‐0.7% off the record. In 11 of May’s 20 trading days, VIX was above 20 but ended at 16.8.
● Everybody’s still a winner. For the second straight month all major asset classes had positive returns, although May’s gains were more modest. Both U.S. and developed international equities are up double digits in 2021, and U.S. real estate is up +18.1%.
● Fixed income was flat. Bonds rose in May, but just barely. The best performers were Treasury‐inflation protected securities (TIPS) and investment‐grade bonds. After a rapid rise in Q1, the 10‐year Treasury yield spent April and May almost entirely in a range between 1.5% and 1.75%, closing May at 1.58%.

Asset Class Performance

May was defined by positive, yet modest, gains for all major asset classes. International developed and emerging market equities led in May. International bonds also finished ahead of U.S. bonds as the U.S. dollar fell further.

Vaccinations & Improving Economy Have Investors Smiling

COVID‐19 trends continue to make material improvements on virtually all fronts. The U.S. has administered over 295 million vaccines, with more than 40% of the population now fully vaccinated. The 7‐day average of new positive cases has declined to the lowest levels since the start of the pandemic and are now down ‐94% from their January highs. The 7‐day average of deaths per day is now under 400, ‐88% from their January highs. The percentage of positive COVID‐19 tests in the U.S. fell below 2% for the first time, a new pandemic low. With all the progress on the vaccination and COVID‐19 case fronts states and businesses began to fully reopen. That has resulted in a U.S. economic recovery unlike any in recent history. Consumers have trillions in extra savings and stimulus funds, banks have amassed capital, business are eager to hire and restock inventories, and new businesses are being established at the fastest pace on record. That all has investors in an optimistic mood. Rather than “Sell in May and Go Away”, investors sent the S&P 500 to new all‐time highs on May 7th while the Cboe VIX volatility index fell to 16.7, near its lowest levels since early 2020. But the remainder of May was a battle between the bulls and bears as the speed of the recovery led to bouts of inflationary scares and shortages of goods, raw materials, and workers. Private sector wages and salaries are up a staggering +19.4%in the past year and are now +5.5% above pre‐COVID levels. Consumer spending was the biggest driver of real GDP growth in Q1, including spending increases for motor vehicles and parts that increased +66.2%, durable goods that rose +48.7%, and food services and accommodations

that jumped +26.6%. Gains like those, even off the extraordinarily low bases from the depths of last year’s COVID lockdowns, are bound to create inflation concerns. U.S. stocks pulled back more than ‐4% from the May 7th all‐time highs in both the second and third weeks of the month, and VIX volatility spiked to about 28 and 26 on each of those declines. But in the end the bulls took the victory as investors pushed aside the inflation fears in favor of recovery optimism. The S&P 500 rose +0.7% to post its fourth consecutive positive month, and sixth of the past seven. The small‐cap Russell 2000 index, which is more leveraged to the economic reopening, posted its eighth straight positive month for the first time since 1995.

Importantly, vaccination rates in Europe have picked up after a relatively slow start. That has helped Eurozone economic sentiment improve for four straight months and hit its highest level since 2018.The COVID crisis in India has also made much needed progress with over 190 million vaccines so far administered–only behind the totals of US and China. As a result, those economies are also rebounding nicely. As seen in the chart above, both developed and emerging international PMIs are rising and are well into expansion levels (above 50). The MSCI EAFE Index gained +3.3% in May, outperforming U.S. stocks for the first time in 2021.

Bottom Line: Global equities rallied for the sixth time in seven months as vaccinations helped accelerate the recovery for most countries. Ongoing fiscal stimulus and improving earnings also boosted investor confidence.

Click here to see the full review.

 

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©2021 Prime Capital Investment Advisors, LLC. The views and information contained herein are (1) for informational purposes only, (2) are not to be taken as a recommendation to buy or sell any investment, and (3) should not be construed or acted upon as individualized investment advice. The information contained herein was obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Investing involves risk. Investors should be prepared to bear loss, including total loss of principal. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Past performance is no guarantee of comparable future results.

Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a
Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management
(“PCWM”) and Qualified Plan Advisors (“QPA”).
© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

Week in Review

Week-in-Review: Week ending in 05.28.21

June 1, 2021

The Bottom Line

● Stocks rallied during the week to close within 1% of their all‐time high. The S&P 500 gained +1%, but small cap Russell 2000 and tech‐heavy Nasdaq led with gains of
+ 2.4% and +2.1% respectively.
● On Friday, the U.S. Department of Commerce reported that the core personal consumption expenditures price index, the Fed’s favorite inflation measure, surged +3.1%year over year in April, its fastest rise since 1992.
● Despite the higher than expected rise in inflation, bond yields backed off from last week’s levels, with the yield on the U.S. 10‐year Treasury note falling ‐3 basis points to 1.59% after being as low as 1.55% on Monday.

Stocks nearly back to record highs

U.S. stocks rallied during the week as the S&P 500 gained+1.2% to closed just ‐0.7% from its May 7th all‐time high of 4,232. Growth stocks in the Communications Services and Information Technology sectors along with the cyclical sectors of Industrials and Materials led the way. The choppy trading that marked much of May subsided in the final week as the Cboe Volatility Index (VIX) fell to 16.7, down from 20.2 last Friday, and marking its lowest level since April 16. A key inflation indicator, the core personal consumption expenditures price index, rose +3.1% from April of 2020, faster than expectations of +2.9%, and the biggest increase since 1992. Despite the inflation surge, bonds still managed to stay positive for the week. After testing the bottom of its recent trading range at 1.55% on Monday, the yield on the 10‐year U.S. Treasury note ended the week at 1.59%, down 3 basis points from the prior Friday. So called “meme stocks” had a surprise revival during the week, fueled by traders in Reddit’s WallStreetBets forum, with names like AMC Entertainment more than doubling in price. Meanwhile in Washington, President Biden proposed the largest U.S. budget since World War II, with a $6 trillion price tag.

Digits & Did You Knows

HEY BIG SPENDER — 59% of US households made a “large purchase” during the first 4 months of 2021, i.e., January 2021 through and including April 2021, the highest percentage reported in 5 years. “Large purchases” include furniture, home repairs and automobiles (source: Federal Reserve Bank of New York, BTN Research).
ROADTRIP — U.S. drivers are projected to use 9.0 million barrels a day of gasoline during the summer of 2021, up from 7.8 million barrels a day of gasoline used during the 2020 “pandemic‐summer”, but still down from 2019’s 9.6 million barrels a day of gasoline consumed (source: Energy Information Administration, BTN Research).

Click here to see the full review.

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Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a
Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management
(“PCWM”) and Qualified Plan Advisors (“QPA”).
© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

Week in Review

Week-in-Review: Week ending in 05.21.21

May 24, 2021

The Bottom Line

● Another late week rally was not enough to undo an early week pullback in choppy trading that was reminiscent of last week. In the end the S&P 500 slipped ‐0.4% for its first back‐to‐back weekly decline since February.
● The U.S. 10‐year Treasury yield was flat at 1.62%, down just ‐0.01 percentage points (or 1 basis point) from last week. But the real yield, adjusted for inflation, rose 9 basispointsto ‐0.83% as inflation breakevens eased – the largest weekly rise since February.
● The employment picture improved yet again with weekly jobless claims falling to 444,000, a new pandemic low for the third week in a row and the fourth weekly decline.

Taper talk & crypto crash sink stocks

U.S. stocks finished mixed as fitful trading continued while the S&P 500 attempted to overcome early week losses, but still fell ‐0.4% to post its first back‐to‐back weekly declines since February. But in a counter trend move, the tech‐heavy Nasdaq Composite Index managed to snap a string of four‐straight weekly losses – highlighting the choppiness and cross‐currents that have defined markets the last few weeks. The minutes from the April Federal Open Market Committee meeting showed that some members of the Fed are ready to discuss tapering bond buying at future meetings, though they were clear to say the economy was still far short of its longer‐run goals. The Fed isn’t about to start raising interest rates, but the bond‐buying taper talk opens the door to tightening of monetary policy sooner rather than later. That, plus a wild ride for cryptocurrency investors (in which bitcoin plunged ‐30% at one point on Wednesday), left investors shaken until positive employment and business activity reports helped stabilize markets on Thursday and Friday. On Friday IHS Markit reported that the flash U.S. services and manufacturing Purchasing Managers Index (PMIs) jumped to record highs in May, beating economists’ expectations.

Digits & Did You Knows

PENT‐UP DEMAND — U.S. consumers purchased $234.4 billion of foreign imports in March 2021, the largest monthly total recorded in U.S. history. The low point for the purchase of foreign imports during the pandemic was $166.5 billion in May 2020 (source: BTN Research).
GIVE ME A HUG — As of Friday 5/14/21, 119 million Americans are fully vaccinated, or 36% of our 332 million population (source: CDC, BTN Research).
ROAD TRIP — The average price of a gallon of gasoline reached $3.04 on Friday 5/14/21, up 79 cents a gallon YTD. The last time gasoline closed a calendar year above $3 a gallon was 2013 (source: AAA, BTN Research).

Click here to see the full review.

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Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a
Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management
(“PCWM”) and Qualified Plan Advisors (“QPA”).
© 2021 Prime Capital Investment Advisors, 6201 College Blvd., 7th Floor, Overland Park, KS 66211.

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