The Markets – as of market close May 28, 2021
June 11, 2021
Stocks were volatile in May, likely a reflection of strength in the U.S. economy as well as concerns about inflation and the timing of when the Federal Reserve might begin to taper its accommodative policies. Regarding inflation, members of the Federal Open Market Committee acknowledged that prices may run higher than the 2.0% target set by the Committee due to transitory supply-chain bottlenecks, which are expected to fade.
Strong first-quarter corporate earnings reports, coupled with declining jobless claims, helped bolster equities during May. Stocks began the month on a high note, despite a lower-than-expected jobs report.
Stocks retreated mid-month as inflation indicators pointed to price growth, while cryptocurrency volatility added to investor uncertainty. Nevertheless, stocks rebounded during the last week of May to pull the major market indexes higher, with only the Nasdaq failing to outperform its April value. Otherwise, the Global Dow led the benchmarks for the month, followed by the Dow, the S&P 500, and the Russell 2000. Year to date, the Global Dow is up nearly 17.0%, followed by the Russell 2000, the Dow, the S&P 500, and the Nasdaq.
The yield on 10-year Treasuries fell 5 basis points in May. The dollar declined 1.3%. Crude oil prices climbed 5.0% to close at $66.64 per barrel. Gold prices advanced for the third consecutive month. The national average retail price for regular gasoline was $3.02 on May 24, $0.15 higher than the April 26 selling price and $1.06 more than a year ago.
Recently Reported Economic Data
- Gross domestic product increased at an annual rate of 6.4% in the first quarter of 2021, according to the second estimate released by the Bureau of Economic Analysis.
- In what may worry some investors, inflation, as measured by the personal consumption expenditures price index, is up 3.6% since April 2020.
- Orders for long-lasting (durable) goods declined in April for the first time following 11 consecutive monthly increases.
- The easing of COVID restrictions may be having a positive impact on cross-the-border trade. The international trade in goods (excluding services) deficit in April (Reported in May) was $85.2 billion, down $6.8 billion, or 7.3%, from March.
- The labor figures show continued declines in new unemployment insurance claims. April saw 266,000 new jobs added, which was below expectations, but still encouraging.
PPP Forgiveness Application Deadline
Congress passed The Economic Aid Act which changed the deferment period from 6 months post covered period to 10 months post covered period. For example, if your covered period ended June 30, 2021, under the new guidelines the earliest your first loan payment wouldn’t be due until April 2022, and you have until then to request forgiveness. Please use the following calculation to help you identify when your forgiveness will be due:
- PPP borrowers may select a covered period anywhere from 8 weeks to 24 weeks.
- RCU is automatically calculating your loan due date based on a 24-week covered period, if you intend on using a shorter covered period please inform us immediately as this will impact your due date.
- Your correct deadline will be reflected in your online banking account.
If all or part of your PPP loan is not forgiven, your first loan payment will be due the first of the following month after a decision is made by the SBA.
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