By Tim Hanna Major U.S. stock market indexes ended mostly lower last week. The S&P 500 increased by 0.02%, the Dow Jones Industrial Average was down 0.50%, the NASDAQ Composite decreased by 0.39%, and the Russell 2000 small-capitalization index lost 0.24%. The 10-year Treasury bond yield rose 7 basis points to 1.63%, as Treasury bonds fell for the week. Spot gold closed at $1,769.13, down 0.45%. Stocks Markets changed very little last week, despite positive earnings reports from five companies that make up over 20% of the S&P 500’s market capitalization. A lot of the earnings news may have been priced in weeks ahead, especially with markets making new highs throughout April and the sideways action experienced last week. First-quarter gross domestic product (GDP) came in at an annualized rate of 6.4% (6.8% was forecast). Unemployment claims were 553,000, slightly higher than the 545,000 forecast. U.S. consumer confidence reported by The Conference Board was 121.7 (113.1 was forecast), hitting its highest level in over a year. The Federal Reserve left rates unchanged and maintained that it does not anticipate rate increases anytime soon. President Biden reached a significant milestone on Friday (April 30): 100 days in office. Bespoke Investment Group compared stock market performance during President Biden’s first 100 days to its performance during the first 100 days of past administrations. Going back to 1900, the Dow Jones Industrial Average’s (DJIA) gain of 9.2% during Biden’s time ranks as the fourth best in a president’s first 100 days. The top three were Franklin Roosevelt (+79.7%), Lyndon Johnson (+12.5%), and William Taft (+15.0%). George H.W. Bush was the only president besides those three to be within one percentage point of President Biden’s current 9.2% gain. What is more impressive is that equities rallied leading up to President Biden’s inauguration. From Election Day close through Inauguration Day, the DJIA was up 13.5%. Including the 100 days in office, the combined gain since the 2020 election is 23.7%. Since 1900, the DJIA only gained more from Election Day through the first 100 days in office during Franklin Roosevelt’s presidency. For comparison, the DJIA was up 14.2% during this period for President Trump and down 15.1% for President Obama. The Bespoke team also researched whether gains (historically) have been pulled forward from future returns. For presidents with similar or greater returns, the DJIA mostly added to those gains for the remainder of the president’s first year in office. Bonds Treasury yields increased last week, sending bond prices lower. The 10-year Treasury held below 1.65% to end the week. The federal funds rate remained unchanged on Wednesday (April 28). Federal Reserve Chair Jerome Powell reiterated that it would be “some time” before the Fed would raise interest rates. He also expressed that policymakers are not ready to begin a reduction in asset purchases The 10-year Treasury traded around the 1.60% support level, highlighted in the following chart. Technicians are watching to see if price action can stabilize below the value zone in orange. Holding below 1.60% could signal a pullback opportunity in rates. T. Rowe Price traders reported “relatively light trading volumes in the investment-grade corporate bond market. Earnings releases resulted in mixed performance across sectors and individual issuers. The high yield market took the dovish tone of Powell’s statement in stride and remained focused on new deals and earnings releases.” Gold Last week, spot gold closed at $1,769.13, down 0.45%. Gold held its short-term higher low set at the beginning of April and is trying to hold its higher short-term-swing high set above the 50-day moving average. The yellow metal is now trading toward the top of a bear price channel as indicated by the two downward-sloping lines in the following chart. As we have mentioned in prior weeks, maintaining price levels above the 50-day moving average could be a signal for a break out to the upside; however, various resistance levels remain above the current price. Flexible Plan is the subadvisor to the only U.S. gold mutual fund, The Gold Bullion Strategy Fund (QGLDX) , designed at its introduction over eight years ago to track the daily price changes in the precious metal. The indicators Our very short-term-oriented QFC S&P Pattern Recognition strategy’s equity exposure was 80% long all of last week. Our intermediate-term tactical strategies are uniformly positive, although to various degrees. The Volatility Adjusted NASDAQ (VAN) strategy started last week with 120% long exposure to the NASDAQ and increased exposure to 140% long at Thursday’s close. The Systematic Advantage (SA) strategy is 120% exposed to the S&P 500, and our Classic approach is in a fully invested position. Our QFC Self-adjusting Trend Following (QSTF) strategy was fully leveraged 200% long throughout all of last week. VAN, SA, and QSTF can all employ leverage—hence the investment positions may at times be more than 100%. Flexible Plan’s Growth and Inflation measure is one of our Market Regime Indicators . It shows that we remain in a Normal economic environment stage (meaning a positive monthly change in the inflation rate and positive monthly GDP reading). Historically, a Normal environment has occurred 60% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Gold tends to outpace both stocks and bonds on an annualized return basis in a Normal environment and carries a substantial risk of a downturn in this stage. From a risk-adjusted perspective, Normal is one of the best stages for stocks, with limited downside. Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 37% of the time since 2003. It is a stage of above-average returns for stocks.