Equities trended higher through the week as positive economic readings and the start of first-quarter earnings announcements bolstered investor sentiment.
Markets kept with that trend Friday, finishing slightly to the upside to reach new highs a day after the Dow closed above 34,000 for the first time.
Financials, industrials and materials led, while technology lagged, reflecting a positive cyclical tone in which value investments outpaced growth.
Overseas markets took a similar path, with equities in Asia and Europe closing higher on the outlook for a global rebound.
Treasury yields moved slightly higher after a sizable pullback on Thursday, with the 10-year rate trending back near 1.6 percent to finish the week.
China reported 18 percent gross domestic product growth over the past year, a strong gain for the world’s second-largest economy, but slightly shy of expectations.
Domestic demand rebounded, but industrial production and capital investment was a bit light, which could be attribute to weaker demand around the world as developed nations were struggling with renewed lockdowns earlier in the year.
China may be a key component in the global economic rebound this year, benefiting from stronger growth in export markets, like the U.S. and Europe.
Here at home, real estate data revealed that housing starts rose by more than 19 percent in March, confirming ongoing strength in the housing market.
Mortgage demand will likely fluctuate in response to moves in interest rates, but, broadly, housing will remain a supportive pillar of the economic expansion ahead.
Home prices continue to firm on the back of robust demand as well as record-high lumber prices.
Morgan Stanley was the latest bank to report better-than-expected earnings Friday.
Financials have kicked off earnings season on positive footing, which is likely to persist in the coming weeks as the remainder of the S&P 500 announces results.
Expectations are for better than 20 percent earnings per share growth this quarter and a nearly 30 percent increase for the year.
This may be the key area of support for the ongoing bull market and will be necessary to justify current elevated valuations and strong market gains during the past year.
Companies that miss expectations could be subject to short-term negative reactions, but, overall, the profit rebound – built on the foundation of the economic recovery – should be a tailwind for performance this year.