Whistling Past The Graveyard? Cracks Emerge As Rally Continues

U.S. equity markets finished decisively higher for the second-straight week as better-than-expected economic data and encouraging news of coronavirus treatments again overwhelmed concerns about the intensification of the pandemic.
Adding to last week's gains of 4.1%, the S&P 500 gained another 1.7% while a relentless rally in large-cap technology stocks powered the NASDAQ to fresh record-highs.
Are bond investors sensing trouble on the horizon or just deflationary pressure? Several high-frequency data points - which had correctly foretold the economic rebound - have shown hints of rolling over.
Commercial equity REITs were among the laggards this week as sentiment remains profoundly negative across most property sectors. REITs dipped 2.4% with 16 of 18 sectors in negative territory.
Homebuilders delivered another strong week, however, as the housing industry continues to lead the early stage of the recovery. Mortgage applications to purchase a home are now higher by 33% from last year.

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