What to Expect in the Markets This Week

Key Takeaways

  • The CDC eviction moratorium is set to expire at the end of March unless it is extended.
  • This upcoming Tuesday, the Conference Board Consumer Confidence Index is released.
  • On Friday, unemployment numbers for Friday will be released.

The S&P 500 returned 1.6% for the week ending March 26, 2021. All but two of the S&P’s 11 sectors were up, the two laggards being consumer discretionary and communication services. Communication services was by far the biggest underperformer of the two, with its benchmark XLC ETF returning -4.0% for the week. The big driver of the sector’s underperformance was the tanking of media conglomerate ViacomCBS’ (VIAC) stock this week. Shares of the media monolith that emerged from a 2019 mega-merger melted-down, falling 49.1% this week after a stock offering at a discount to ViacomCBS’s Monday price was followed by a negative analyst report by research firm MoffettNathanson and another from a Wells Fargo analyst. Both reports said the company was overvalued as it lost revenue from cable-cutting far faster than it was gaining it from streaming. Real estate was the best performing sector of the 11. The benchmark XLRE ETf returned 3.9% for the week.

Source: YCharts.com.

This week we’re looking at the possible expiration of the CDC eviction moratorium, the Conference Board Consumer Confidence Index, and March unemployment numbers. But first, let’s see how different asset classes have been doing.

Events Next Week

Monday, March 29:

  • Market Holiday in India for Holi.
  • Japanese Retail Sales (February).

Tuesday, March 30:

Wednesday, March 31:

  • Markets Close Early in Norway for Easter, at 1 p.m. Central European Time.
  • Last Day of CDC Eviction Moratorium if it Is Not Extended.
  • U.K. Gross Domestic Product (GDP) (Q4).
  • U.K. Current Account (Q4).
  • French Consumer Spending (February).
  • German Unemployment Rate (March).
  • ADP Nonfarm Employment Change (March).
  • U.S. Pending Home Sales (February).
  • Japanese Tankan Large Manufacturers Index (Q1).
  • Chinese Caixin Manufacturing PMI (March)

Thursday, April 1:

  • Markets Closed in Norway and Mexico for Maundy Thursday.
  • German Retail Sales (February).
  • German Manufacturing PMI (March).
  • French Manufacturing PMI (March).
  • Italian Manufacturing PMI (March).
  • Eurozone Manufacturing PMI (March).
  • U.K. Manufacturing PMI (March).
  • Brazilian Industrial Production (February).
  • U.S. ISM Manufacturing PMI (March).
  • Organization of Petroleum Exporting Countries (OPEC) Meeting.

Friday, April 2:

  • Market Holiday in the Following Countries for Good Friday: United States, United Kingdom, Germany, Switzerland, Italy, Norway, France, Spain, Australia, Singapore, Brazil, South Africa, India, Canada, Mexico, and New Zealand. Chinese Markets in Hong Kong Are Also Closed.
  • U.S. Nonfarm Payrolls (March).
  • U.S. Labor Force Participation Rate (March).
  • U.S. Unemployment Rate (March).

Eviction Ban Potentially Ending

On Sept. 4, 2020, an eviction moratorium was put in place by the Centers for Disease Control (CDC), because evictions force people into crowded conditions, such homeless shelters, and crowded conditions exacerbate the spread of the coronavirus. After being extended as part of the December stimulus package, the ban is effective through the end of March, which ends this upcoming Wednesday. Extension of the ban looks likely, as the CDC has sent a proposal to the office of Management and Budget for extending the proposal. However, it is not certain and it is also uncertain how long the ban will be extended for, thought the Washington Post has reported it may be extended through July.

This uncertainty comes at a time when roughly one in five adult renters say they didn’t pay last month’s rent according to the Household Pulse survey by the Census Bureau, a figure closer to 1 in 3 for Black renters. Research in the Journal of Urban Health published late last year bore out the CDC’s concerns about the effect of evictions on the spread of the disease. Before the national ban went into effect, various states issued eviction bans, and the paper found that lifting those ban left to 433,700 additional cases of COVID-19, causing 10,700 additional deaths.

U.S. Consumer Confidence

The Conference Board Consumer Confidence Index is released this upcoming Tuesday, the second major metric of consumer sentiment to be released this month. The first this month, the University of Michigan Consumer Sentiment Index was released last Friday and showed a reading of 84.9, the highest since the start of the pandemic. If the Conference Board index is similarly positive, the two measure consumer’s feelings in somewhat different ways, it will be a strongly optimistic sign for the economy.

U.S. Unemployment Rate and Labor Market

The unemployment rate in February 2021 was 6.2%, down very slightly from the 6.3% in January. While these numbers are substantially down from the double digit peak reached last year, they are also still elevated substantially from pre-pandemic levels. There are signs of continued recovery as initial unemployment claims fell to the lowest level since the start of the pandemic this past Thursday. In addition, check on the labor force participation rate, which is also announcement on Friday to see if any decrease in the unemployment rate is due to people gaining jobs or due to people dropping out of the labor force.