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The Weekly Update

Week of July 19th, 2021
By Christopher T. Much, CFP®, AIF®

Despite a good start to earnings season and some solid economic data, worries of slower second-half economic growth led to a pullback in stock prices last week.

The Dow Jones Industrial Average fell 0.52%, while the Standard & Poor’s 500 lost 0.97%. The Nasdaq Composite index sank 1.87% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was flat (-0.06%).

Stocks Retreat
Stocks weakened amid an active week of news, including two important inflation reports, Congressional testimony from Fed Chair Jerome Powell, a string of economic reports, and the start of the second-quarter earnings season.

The earnings season began on a strong note as 95% of the first S&P 500 constituent companies to report checked in with “earnings above estimates” by an average of 22%. Despite these above-expectation earnings, stocks moved little on the results.

Bond yields continued …

The Weekly Update

Week of July 12th, 2021
By Christopher T. Much, CFP®, AIF®

Stocks managed small gains as investors wrestled with concerns over economic growth prospects and a rise in COVID-19 infections.

The Dow Jones Industrial Average picked up 0.24%, while the Standard & Poor’s 500 gained 0.40%. The Nasdaq Composite index added 0.43%. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.78%.

A Choppy Week
In a truncated week of trading, stock market action was turbulent and indecisive. A mixed start saw cyclical stocks sell off amid concerns of slowing economic growth, while growth stocks advanced in response to falling yields.

After strengthening mid-week with the release of the FOMC meeting minutes, stocks skidded when reopening fears resurfaced Thursday on a new wave of global COVID-19 infections and Japan’s emergency declaration that reintroduced lockdown protocols. This led to a broad-based sell-off, with financials, home builders, and technology hit hard. A …

The Weekly Update

Week of July 5th, 2021
By Christopher T. Much, CFP®, AIF®

Strong employment reports and rising consumer confidence sent the stock market broadly higher last week.

The Dow Jones Industrial Average rose 1.02%, while the Standard & Poor’s 500 picked up 1.67%. The Nasdaq Composite index gained 1.94%. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.42%.

Stocks Rally
Rising conviction in the economic recovery and waning inflation worries drove stock prices higher, with the S&P 500 and Nasdaq Composite racing to record closes to begin the week.

Amid the week-long march higher, market leadership changed hands throughout the five-trading days. The leadership baton alternated between the technology and high-growth companies, which responded to lower bond yields, and cyclical stocks, which rallied on higher oil prices and successful bank stress tests.

Economic news buoyed investor sentiment as consumer confidence rose and an improving labor market—weekly initial jobless claims came in …

The Weekly Update

Week of June 28th, 2021
By Christopher T. Much, CFP®, AIF®

Stocks reached new all-time highs last week as markets staged a strong rebound from the previous week’s declines.

The Dow Jones Industrial Average rose 3.44%, while the Standard & Poor’s 500 picked up 2.74%. The Nasdaq Composite index increased 2.35%. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.97%.

Stocks Climb
Stocks rallied on the first day of trading last week and gained further momentum on Thursday and Friday. Despite some discouraging data on housing and initial jobless claims, stocks managed to set new highs, as investors cheered an agreement between President Biden and a group of senators that appeared to pave the way for the passage of a $1 trillion infrastructure bill.

Positive results from the Federal Reserve’s stress tests of banks, which raised the prospect of banks raising their dividend payouts and share buybacks, and a …

The Weekly Update

Week of June 21st, 2021
By Christopher T. Much, CFP®, AIF®

New messaging from the Federal Reserve on interest rates and inflation last week led to a broad retreat in stock prices.

The Dow Jones Industrial Average dropped 3.45% while the Standard & Poor’s 500 lost 1.91%. The Nasdaq Composite index slipped 0.28% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 0.64%.

Unsettled Markets
The Federal Reserve’s announcement on Wednesday that interest rate hikes may likely occur sooner than expected and that it had underestimated the pace of inflation unsettled investors. The hardest hit groups were cyclical stocks, like energy, materials, and industrials, as well as financials and consumer staples.

Losses accelerated into the week’s close on comments by St. Louis Fed President James Bullard that the first rate hike could be as soon as 2022.

The bond yield curve flattened, as short-term interest rates rose in …

The Weekly Update

Week of June 14th, 2021
By Christopher T. Much, CFP®, AIF®

Stocks ended the week mixed as investors appeared to shrug off a hotter-than-expected inflation report.

The Dow Jones Industrial Average slipped 0.80%, while the Standard & Poor’s 500 advanced 0.41%. The Nasdaq Composite index led, tacking on 1.85%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.31%.

Another Quiet Week
The market traded in a narrow range for much of last week as investors anxiously awaited the release of the Consumer Price Index (CPI) on Thursday.

May’s CPI saw an increase in inflation that exceeded most expectations. Paradoxically, markets advanced on the news, sending the S&P 500 to a new record close and the technology-heavy NASDAQ Composite higher. Perhaps equally unexpected was the decline in the 10-year Treasury yield, which slipped to 1.45%, touching its lowest level in three months.

On Friday, stocks were unable to materially build on …

The Weekly Update

Week of June 7th, 2021
By Christopher T. Much, CFP®, AIF®

A strong, but not too strong, employment report sparked a rally on the final day of trading, propelling stocks to a modest gain for the week.

The Dow Jones Industrial Average climbed by 0.66%, while the Standard & Poor’s 500 added 0.61%. The Nasdaq Composite index increased by 0.48%. The MSCI EAFE index, which tracks developed overseas stock markets, edged up 0.10%.

Rotation Continues
Markets have traded sideways since mid-April, though beneath the surface has been ongoing sector rotation. Last week continued that trend.

While stocks ended on a strong note, the performance of industry sectors varied widely. Energy, real estate, utilities, and a number of reopening stocks performed well, while consumer discretionary, communication services, healthcare, and technology stocks lagged.

The Fed announced on Wednesday that it will soon begin selling the corporate bonds and exchange-traded funds it had accumulated during the …

The Weekly Update

Week of June 1st, 2021
By Christopher T. Much, CFP®, AIF®

Optimism over the economic reopening and renewed enthusiasm for technology and other high-growth companies powered the stock market higher last week.

The Dow Jones Industrial Average rose 0.94%, while the Standard & Poor’s 500 climbed 1.16%. The Nasdaq Composite index led, picking up 2.06%. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.46%.

Solid Gains
Stocks rallied on renewed confidence in the economic recovery, lower inflation worries, and rising comfort with Fed officials talking about the potential for easing of its monthly bond purchases. Technology, communication services, and reopening stocks were among the market leaders.

Investor sentiment was buoyed late in the week by an encouraging jobless claims number and the unveiling of a Republican infrastructure proposal. A somewhat hotter-than-expected inflation indicator on Friday did nothing to dampen optimism as stocks added to their gains ahead of the …

The Weekly Update

Week of May 24th, 2021
By Christopher T. Much, CFP®, AIF®

Stock prices fluctuated amid inflation concerns and bargain hunting, leaving stocks mixed for the week.

The Dow Jones Industrial Average slipped 0.51%, while the Standard & Poor’s 500 dropped 0.43%. The tech-heavy Nasdaq Composite index advanced 0.31%. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.67%.

Lots of Motion, Little Movement
Stocks began last week extending their losses from the previous week, as the slide in technology and other high-growth stocks resumed. Inflation worries also weighed on the market.

After steep declines in early Wednesday trading, market sentiment took a more positive turn, allowing stocks to pare their losses as the session came to a close, despite news that the Fed could be contemplating tapering its monthly bond purchases.

This positive momentum continued into Thursday, aided by a declining initial jobless claims number and a strong rebound in technology. …