Monthly Performance Report August 2021
To the casual eye equity markets led by the S&P 500 index-free climbs past another record gain of 2.38% in July was anything but routine. With close scrutiny as the undertow from the economic skepticism from the delta variant and emerging markets uncertainty with China’s sudden stock market crackdown temporarily splintered the global recovery. What should have been a choreographed global economic recovery instead behaved like an economic slowdown from the composition of the equity and bond markets.
Storms Stir Up Energy Stocks
Stocks finished the week lower on mixed economic data. Energy stocks gained for the week as storms in the Gulf of Mexico threatened to disrupt oil production while materials and utilities lagged. The August CPI came in lower than expected, supporting the Federal Reserve’s position that transitory factors are caused by rising prices.
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Is it STAGFLATION?
Some investors fear a slowing economy, while others fear higher inflation. And some fear that both will happen, which is called stagflation. We might get an indication of which is the case this week with the August sales report and the Consumer Price Index (CPI) data.
Full FDA Approval Helps Sentiment
It was a good week for equities as stocks hit new all-time highs once again. The Pfizer Vaccine’s full FDA approval helped sentiment early in the week before turning sad with the news of an attack at Kabul airport in Afghanistan. Investor sentiment ended on a high note with the Federal Reserve Chairman Powell on Friday.
Monthly Performance Report July 2021
To the casual eye equity markets led by the S&P 500 index-free climbs past another record gain of 2.38% in July was anything but routine. With close scrutiny as the undertow from the economic skepticism from the delta variant and emerging markets uncertainty with China’s sudden stock market crackdown temporarily splintered the global recovery. What should have been a choreographed global economic recovery instead behaved like an economic slowdown from the composition of the equity and bond markets.
Retail Sales Slumping
Disappointing consumer confidence numbers and slumping retail sales data have investors worried that economic growth might have peaked. This week, we will have economic reports around manufacturing, services, home sale, personal income, and spending.
Consumer Confidence Down
A gloomier outlook reported by the University of Michigan index of consumer confidence released last Friday caused yields to fall.The spread of the delta variant of Covid has dampened the confidence of the consumer to the lowest level since 2011, according to Bloomberg.com.
Nonfarm Payrolls Up
Inflation will gain most of the attention this week, with data reports expected on consumer and producer level inflation. With the labor market on the mend, inflation will continue to be on investors’ minds as both labor and inflation are key factors that influence the Federal Reserve’s decisions on policy. The consumer price index and the producer price index will be released on Wednesday and Thursday, respectively.
Global Markets Rocked by China
With U.S. markets focused on the economic recovery and rising inflation, global markets were rocked by China’s social crackdown now reaching its capital markets. Several of China’s regulatory agencies cracked down on overseas IPOs, resulting in China’s stock market falling more than 10% early in the week.