As more Americans get vaccinated and the economy reopens, travel is picking up

The Markets

All three main US stock indexes fell on Friday, and closed down slightly for the week. The Dow Jones Industrial Average ended Friday at 33,875, down -0.3% for the week. The broader S&P 500 index closed Friday at 4,181, down -0.1% for the week. And the tech-heavy Nasdaq ended Friday at 13,963, off -1.2% for the week. Market observers see economic good news already reflected in stock prices, and so the lackluster week was attributed to concerns about rising coronavirus cases and rising Treasury yields. Despite the week’s flat performance, the S&P 500 rose nearly 5.3% in April, while the Dow added about 3% and the Nasdaq gained 5.4%.

The Economy

The US economy grew by an annualized 6.4% in the first quarter, building on a 4.3% expansion in Q4 2020. The result was slightly better than market expectations of 6.1%.

TE GDP growth chart 2021 04 30

Source: Trading Economics

The Euro Area economy shrank 0.6% in the first quarter, a slightly better result than markets had anticipated. The region entered a “double dip” economic recession in the period, with new COVID-related lockdowns severely impacting the service sector. At a national level, Germany, Italy and Spain fell back into an economic contraction, while France’s economy returned to growth.

TE Euro Area GDP 2021 04 30

Source: Trading Economics

Oil prices fell more than 2% on Friday, with the price of benchmark West Texas Intermediate crude falling to $63.50 a barrel on concerns that the coronavirus crisis in India may depress oil demand. For the month, though, the US benchmark rose more than 7%, on optimism about robust recovery in demand recovery in the second half of the year.

The chart below shows the change in oil prices over the past 25 years:

TE WTI Prices Last 25 years

Source: Trading Economics

The Labor Market

The number of Americans filing new claims for unemployment benefits fell to 553,000 in the week ended April 24th from an upwardly revised 566,000 in the previous week and slightly above market expectations of 549,000. It marks a third consecutive week with claims below 600,000. Still, the level of claims is far higher than the 230,0000 level that prevailed before the coronavirus pandemic erupted in March 2020.

And while the unemployment rate has fallen over the past several months, about 8.4 million jobs lost during the pandemic have yet to return.

TE Jobless Claims 2021 04 25

Source: Trading Economics


The US annual inflation rate climbed to 2.6% in March from 1.7% in February, slightly above market forecasts of 2.5%. It’s the highest reading since August 2018, and is largely due to rising energy prices.

The Federal Reserve has stated that it plans to continue its bond-buying program and policy of keeping interest rates very low, a signal that the bank wants to see more evidence of a strengthening economic recovery before it considers reducing its support.

In a statement last Wednesday, the Fed said the economy and job market have “strengthened,” and while inflation has risen, they attribute the increase to temporary factors.

The Fed left its benchmark short-term rate between 0% and 0.25%, where it’s been since the pandemic erupted nearly a year ago, to help keep loan rates down to encourage borrowing and spending. It also said that it would keep buying $120 billion in bonds each month to try to keep longer-term borrowing rates low.

TE Inflation History 25 years

Source: Trading Economics

Administration Proposals

Last week, the New York Times reported that the Biden administration will propose raising taxes on the wealthiest Americans to pay for increased spending on childcare and education.

The American Family Plan is expected to incorporate investments targeted at reducing poverty, lowering childcare costs, implementing a national paid leave program and making both pre-kindergarten and community college free.

It would be paid for by increasing the capital gains tax for people earning more than $1 million annually, and by increasing the top marginal income tax rate from 37% to 39.6%.


Globally, across 192 countries and regions, nearly 153 million people have contracted some variant of the coronavirus, and over 3.2 million have died. In the US, over 32.4 million have been infected and over 577,000 have died.

The chart below shows that as vaccinations have increased, testing has declined. Fortunately, the positivity rate is below 5% again, though this number varies widely by state. Oregon, in particular, is experiencing an explosion is new cases.

JHU Testing Positivity 2021 04 30

Source: Johns Hopkins University

The chart below shows the number of daily cases across the US:

CDC Daily Cases Trend 2021 04 30

Source: CDC


The number of COVID-related hospitalizations is down sharply from the highs of January, but seem to have plateaued at a relatively high level – likely the result of the emergence of more transmissible variants.

CDC Hospitalizations 2021 04 30

Source: CDC


In both absolute and relative terms, the US’s track record for vaccination is impressive. Early in January, the US lagged Israel and a few other countries in the number of vaccine doses administered per capita. But over the past several weeks, we have consistently administered between 2 million and 3 million doses per day, with the result that today it’s estimated that over 100 million Americans are fully vaccinated against the coronavirus.

CDC Vaccine Doses Administered 2021 04 30

Source: CDC


According to experts, we are still a long way from “herd immunity” against the coronavirus. In order to achieve this level of protection for our society, we will need to overcome “vaccine hesitancy” – primarily among older, rural men – and we will need to start vaccinating more young adults and children.

At Springwater, we’re looking forward to putting this devastating pandemic behind us, and returning to some semblance of our pre-pandemic “normal”.

Keep the faith, get vaccinated when you can, be safe, and stay healthy.


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