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.
Monthly Performance Report June 2021
As the economy continues to gain steam, the transitory inflation debate continues to be the juggernaut for the markets, creating disproportionate gains for growth stocks not seen since Q3 2020. The S&P 500 Index produced a return of 8.6%, while the S&P 500 Growth index returned 11.9% over the S&P 500 Value index return of 5%.
Cloud Computing Competition Up
Competition in cloud computing between Amazon’s AWS, Google Cloud, and Microsoft’s Azure is getting more intense as it makes up a major source of revenue growth for all three companies. Plus, earnings season is in full swing.
Housing Market Cooling
Housing market looks to be cooling as existing home sales dropped by 0.9%. Lumber is down 60% from recent highs. Earning season picks up this week with reports from airlines, railroads, drug companies and technology.
Apple Driving Market Rally
Last week, meme stocks grabbed the headlines while stocks in general inched to record highs. Read more about upcoming economic reports and possible Fed responses in the Week Ahead.
2021 MEN of DISTINCTION
Bill Sowell and his wife, Cindy, have worked side-by- side together for more than 20 years. The duo have made Sowell Management one of the most successful and trusted investment firms in the entire state. Outside of dollar signs and portfolios, Sowell enjoys golfing, boating and duck hunting.