The first quarter looks to be the turning point, both for the pandemic here in the U.S. and for the economic damage it has caused. While risks still remain, especially in the short term, the significant progress we made in the first two months of the year started coming to fruition in March, signaling that we are through the worst of it.

Last week saw a number of important economic updates, with results largely coming in above economist estimates. Highlights included better-than-expected results for March’s consumer and business confidence surveys and a much-better-than-expected March jobs report. This will be another busy week for updates, with a focus on international trade, the minutes from the most recent Fed meeting, and a look at producer inflation in March.

In March, we saw a strong end to a healthy first quarter for stock markets. Both the Dow and S&P 500 here in the U.S. showed gains, while developed markets abroad showed lower but still positive returns. We also had good news on the economic front. Hiring rebounded, layoffs dropped, and consumer confidence rose to post-pandemic highs.

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. After several weeks of improvement on the medical front, we’re starting to see modest deterioration as the country reopens. Case counts and positive test rates are back to early March levels, while hospitalizations and death rates have stabilized. While the short-term risks are real, we do have a better outlook for the next two to three months. At that point, between vaccinations and existing exposure, we should be at or close to herd immunity.

We have had a lot of good economic news recently, including the significant bounce in consumer confidence reported by the Conference Board. Consumer confidence rose by more than 20 percent last month, to the highest level since September, before the third wave. According to that increase, people are feeling much better about the economy and their place in it.

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Last week saw the release of a number of important economic updates. February’s housing sales and durable goods orders reports continued to show the negative impact from winter weather during the month, but the recent initial jobless claims report and March’s consumer sentiment survey point toward potentially faster growth. This will be another busy week of updates, with a focus on consumer and manufacturer confidence as well as March’s employment report.

For the first time in several weeks, the big picture on the medical front has gotten worse. Case growth and positive test rates have ticked back up as the economy has reopened. While the change is relatively small so far, it is a reversal of previous improvements and signals that both reopening and the spread of more contagious variants are outpacing the positive effects of vaccinations. Faster spread has therefore moved from a potential risk to an actual one.

Today's post is from Anu Gaggar, senior investment research analyst.

Today's post was cowritten by Chris Stuart, senior investment research analyst.