Fun Facts about March
- Birthstone: aquamarine and bloodstone
- Flower: daffodil
- Zodiac signs: Pisces and Aries
- The name March comes from the Roman god of war, Mars. For many years, March, being the start of spring, was also the start of the New Year.
- March 8 is International Women’s Day, which is a day that not only celebrates the achievements of women and the progress made toward women’s rights, but also brings attention to ongoing struggles for equality around the world.
- March 14 is the start of Daylight-Saving Time, which begins at 2:00 A.M. that day. If your area observes it, don’t forget to “spring forward” and set the clocks one hour ahead, or you may find yourself an hour late to everything!
- March 17 is St. Patrick’s Day. According to folklore, folks wear a shamrock on St. Patrick’s Day because the saint used its three leaves to explain the Trinity.
- March 20 brings about the March equinox—also called the vernal or spring equinox in the Northern Hemisphere—marking the beginning of spring. In the Southern Hemisphere, this date marks the autumnal equinox and the beginning of fall. On this day, the Sun stands directly over Earth’s equator.
- March 27 is the start of Passover, which begins at sundown on this day.
Stocks managed to muster a little comeback after starting off the year in the red. The S&P 500 rose almost 3% in February and is now positive for the year by 2.2%.
All sorts of good news is coming out with our battle against covid. We’re getting close to almost 2 million doses per day which should get us to herd immunity by October. But with vaccine production ramping up, we could see herd immunity sooner than that. I’m thinking around July (fingers crossed). There is definitely optimism in the air. Cruise bookings are jumping as well as air travel. I recently flew down to Florida and all 4 planes that I flew on had every seat filled.
Regarding the pandemic, we’re obviously not out of the woods by any means, but there is plenty of good data coming out that indicates we are much closer to getting back to some sort of normal.
Take a look at the Outlook section below to see what events could move the markets over the short term.
Bond prices continue to drop as the world starts to reopen. February was the third month in a row for falling prices. This trend should continue as our economy gets back to a more normal mode. Not a good sign for holders of bonds with long maturities. If you are a bond buyer and this trend continues, try and keep your bond maturities short, no more than 2 years, to reign in some of the risk in your portfolio.
The 10-year US Treasury note is yielding 1.46% and the 30-year bond is at 2.18%, both much higher from last month. It’s starting to get interesting because rates may keep rising to a point that bonds will look as attractive as stocks. This could cause a stock market selloff, so it is something to monitor closely.
Interest rates rose once again as the goal of reaching herd immunity becomes more realistic. Rates are still very low, but they seemed to have bottomed out and are marching onward and upward.
On the savings side, most rates moved slightly down even though bond rates went sharply higher.
Currently, the average savings account is paying 0.26%, slightly lower than last month. Although it is safe, it’s not the place to put all of your retirement savings, that’s for sure.
The 1-year CD interest rate is now averaging 0.52%, about the same it was yielding a month ago. The 5-year CD rate is flat as well, still at 0.69%.
Mortgage rates rose smartly, but still continue to remain incredibly low, which is great news for home buyers, real estate investors and refinancers. Currently, the 30-year rate is at 3.14%, notably higher than the 2.86% it was charging last month. Demand remains very strong for homes as inventories continue to diminish. It is definitely a seller’s market in the housing sector as these low rates are enticing first time homebuyers as well as city workers moving out to the burbs in response to work-at-home options.
Oil prices really shot up in February in response to the increased demand as the world starts moving around again. This was the fourth month in a row of higher prices, with prices jumping 18% in February.
Travel is continuing to pick up, especially by air, and as more vaccines get into people’s arms, the more confident people will be to travel, which should boost prices even more.
Gasoline prices moved higher in February, as expected. Prices at the pump are averaging about $2.72 per gallon, about 30 cents higher than a month ago. Mississippi has the cheapest fuel again, at $2.38. FYI, a year ago, we were paying $2.46.
Check out the prices at the pump in your area: Gas Buddy.
Outlook
Events on the horizon that could move the markets in the near term:
- More Stimulus: Still waiting. The bill has passed in the House of Representatives and now goes to the Senate with the hopes of becoming law by mid-March. I feel like this is pretty much baked into the cake already, at least the stimulus payments anyway. If it fails to pass or passes with reduced stimulus payments, we could see a short-term selloff in the markets.
- Coronavirus: We’re making incredible progress on the vaccination front. Another vaccine has been approved (Johnson & Johnson) and this one requires only 1 shot. We are up to 1.74 million doses per day and a total of 75.2 million doses have been given so far. This puts us close to 10% of the population being vaccinated. Herd immunity is expected to be reached in early fall. I believe it could be earlier once we get this third vaccine in the pipeline. Really good news all around. Let’s keep it going.
- Trade Wars/Tariffs: Right now, it looks like Biden is putting this on the back burner. I have to disagree. These tariffs are putting a hurting on our economy. A recent study shows that the tariffs have cost the U.S. 245,000 jobs since they were implemented. Tariffs might have worked 150 years ago but in today’s global economy, they benefit neither party. Get rid of them and stop the bleeding. This will be a nice boost for the markets if we get rid of them.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
