U.S. Treasury Yield Curve

The bond market began to exhibit concern about future inflation, as signs of an improving economy and higher prices began to show up in the data. While the Chairman of the Federal Reserve maintained the current narrative—that is, accommodating monetary conditions to support economic recovery—the markets began to price uncertainty from the 5-year Treasury bond out to the 30 year. The 30-year yield increased 0.57%, in a nearly parallel shift seen in Chart 1.

U.S. & World Equity Indexes; 3/1/21; YTD Return
S&P 500; 3,884; 3.41%
Dow Jones Industrials; 31,469; 2.82%
Nasdaq Composite; 13,448; 4.34%
Shanghai Composite (China); 3,508; 1.02%
S&P BSE Sensex (India); 50,296; 5.33%
Nikkei Stock Avg (Japan); 29,408; 7.16%
CAC 40 (France); 5,809; 4.65%
DAX (Germany); 14,039; 2.34%
FTSE 100 (U.K.); 6,613; 2.37%
Selected Interest Rates; 3/1/21; 2/2/21
15-Year Mortgage; 2.34%; 2.26%
30-Year Mortgage; 2.97%; 2.71%
5-Year Treasury Bond; 0.71%; 0.37%
10-Year Treasury Bond; 1.45%; 0.90%
30-Year Treasury Bond; 2.23%; 1.63%
Key Economic Statistics; Most Recent; Prior Month
Producer Price Index; 0.30%; 0.30%
Consumer Price Index; 0.30%; 0.40%
Unemployment Rate; 6.30%; 6.70%
ISM Manufacturing Index; 60.80; 58.70
ISM Services Index; 58.70; 57.20
Change in Non-farm Payroll Emp.; 49,000; -140,000
New York State
Consumer Price Index - NY, NJ, CT; 0.40%; -0.30%
Unemployment Rate; 8.20%; 8.40%
Empire State Manufacturing Survey; 12.10%; 3.10%

Non-Farm Payroll

The Non-Farm Payroll data through January 2021 shows a gradual weakening in new job creation and a one-month loss in December that broke the seven-month streak of positive job news that began in May 2020. The unemployment rate fell to 6.3% in the most recent sampling. The markets appear to be forecasting an improving economy, as reflected in higher long-term interest rates. The course of the economy will depend on the course of COVID-19 vaccinations and easing of emergency restrictions.

Forté Capital’s Proprietary Market Risk Barometer

Equity Market Statistics; Most Recent; Prior Month
Dow Jones Industrials; 3/1/21; 2/2/21
Dividend Yield; 2.01%; 2.10%
Price/Earnings (12-Mth Trailing); 28.00; 28.76
Price/Earnings (Projected); 22.74; 24.41
S&P 500 Index; 3/1/21; 2/2/21
Dividend Yield; 1.55%; 1.59%
Price/Earnings (12-Mth Trailing); 34.24; 31.24
Price/Earnings (Projected); 21.95; 22.94

The information herein was obtained from various sources believed to be accurate; however, Forté Capital does not guarantee its accuracy or completeness. This report was prepared for general information purposes only. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities, options, or futures contracts. Forté Capital’s Proprietary Market Risk Barometer is a summary of 30 indicators and is copyrighted by Forté Capital LLC. For further information, visit www.fortecapital.com, send a message to [email protected], or call 866-586-8100 and ask for David W. Henion, CPA, or Larry H. Rabinowitz, CPA/PFS.