Weekly Market Commentary - March 9, 2021

An Oxford Harriman & Company Commentary

Over the weekend the Senate passed the $1.9 trillion stimulus bill and the House will debate it on today. President Biden could sign the bill as early as this week. This will meet the expectations by the market we have been writing about for the past three months.

Stocks experienced another week of volatility last week due to continued good economic and vaccine news that continues to be viewed as inflationary. Also, while Fed Chairman Powell’s comments last week did not help yields from rising as he failed to reassure markets the Fed will do what it takes to keep yields across the curve low.

As a result, the 10-year Treasury yield is once again testing 1.6%, which pressured stocks again.

To reiterate our comments from last week, the economic outlook is improving and inflation expectations are rising, causing the Treasury yield curve to steepen. A steeping in the yield curve means that long-term interest rates are moving higher than short-term rates.

Once again, investors seem convinced 2021 will include a big economic recovery and more government stimulus. The big question is how strong and sustainable will this recovery be?

We remain concerned about oil prices as higher that moved above $60 last week and are above $70 as of this writing.

Warm regards,

Dennis P. Barba, Jr.

President & Managing Partner

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