April Investment Bulletin

Bill Norris

April 07, 2021

Stay current on what’s happening in the economy to help you better understand how the financial news relates to your investments.

March key drivers

  • Despite recent upward trends in new COVID-19 cases in the US and Europe, markets continue to move higher as evidence of the slow reopening of the global economy continues to emerge. For the month, the S&P 500 index gained over 4%, while the Russell 3000 Value index gained over 5%, suggesting the growth to value rotation in the US was picking up. Overall, risk assets continue to trade higher on the year.
  • For the first time since the end of January, we saw an uptick in equity volatility that was mainly driven by the fact that we saw a move towards higher interest rates, particularly the 10-year Treasury yield. Although the move in yields in March was an increase of over 25 basis points, overall current yield levels are well below the 5-year highs that we saw in November of 2018.
  • The COVID-19 relief bill was passed and signed into law allowing additional fiscal stimulus to flow into the US economy. The support at the individual, small business and municipal level was critical to ensure the economic recovery could be sustained.
  • Economic data in the US suggested consumers are starting to feel much better. Consumer confidence rose to its highest levels since the pandemic began in March, while weekly unemployment claims trended lower during the month. Step by step, it appears we are moving forward, and equity returns reflect this.

What to watch in April

  • Much like the past year, the impact of the virus and the vaccine rollout will determine the path forward and remain the focus for investors. Promising data is emerging on the effect of the past few months’ vaccination efforts, while at the same time, we are seeing some economies having to pull back from reopening. This will likely be the case for the next few months, but it does not alter our view that the latter half of 2021 should be strong for economic growth.
  • The future level of interest rates will continue to be a driver for equity markets. Although the Federal Reserve (Fed) is not expected to make any changes in monetary policy until 2023, investors are becoming increasingly concerned over inflation pressures leading to higher rates and a sudden change in Fed stance. Higher rates are a function of stronger economic growth, but the potential level of inflation needs to be factored in as well.
  • Earnings season kicks off in early April and as of now, the estimated earnings growth rate for companies in the S&P 500 according to FactSet is 23% compared to last year. This would be the highest since Q3 of 2018. 
  • Advanced estimates for Q1 2021 US GDP growth will be released on April 29. Current estimates for growth in the quarter, according to the Atlanta Fed GDP tracker, could see growth as high as 6%.

Global asset class total returns through 3.31.2021
Global asset class total returns through 03.31.2021


Bill Norris is chief investment officer and head of asset management for CIBC Bank USA. In this role, he oversees investment management, trust and estate services to individual and institutional clients of CIBC Bank USA. Bill also serves as a member of CIBC Private Wealth Management’s Asset Allocation Committee with more than 35 years of industry experience.