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Weekly Commentary

Weekly Commentary (11/22/21) – Markets Finished Mixed for the Week

Markets finished mixed last week as investors cheered continued strong earnings from corporate America only to be discouraged by resurgent cases in COVID-19. Austria became the first country in Europe to re-impose a full lock-down.

For the week, the DJIA lost 1.29% while the S&P 500 gained 0.36%. The tech-heavy Nasdaq finished the week 1.27% higher. For the week, the MSCI EAFE Index finished lower by 0.78% while emerging market equities (MSCI EM) struggled and closed lower by 1.25%. Small company stocks, represented by the Russell 2000, finished in the red by 2.83%. Fixed income, represented by the Bloomberg/Barclays Aggregate, was relatively flat as it finished up 0.09% for the week as yields moved slightly lower as some economic data released last week suggest that inflationary pressures may begin to ease next year. As a result, the 10 YR U.S. Treasury closed at a yield of 1.54% (down 4 bps from the previous week’s closing yield of ~1.58%). Gold prices closed at $1,851.20/oz – down by 0.89% on the week. Oil prices were materially lower for the week as crude closed at $76.10 per barrel, lower by 5.81%. Oil is up 56.84% year-to-date … certainly denting consumers’ pocketbooks and businesses’ margins.

Economic news released last week was fairly encouraging. The NY Empire State Manufacturing Index for November came in much better than expected as it rose to 30.9 from 19.8 the previous month. October retail sales for retail and food services showed year-over-year growth of 16.3%, well ahead of an expected reading of 13.9%. The Philly Fed Manufacturing Index for November came in at 39, much better than the consensus of a slight increase to 24. Offsetting the excellent retail sales and manufacturing numbers was a weak October Housing Starts. Housing Starts in October fell to 1.52 million against the expected rate of 1.576 million – this reflects the third time in the past four months that housing starts fell.

This holiday-shortened week will feature reports on October existing and new home sales, Consumer Sentiment, October Durable Goods and weekly jobless claims. We also expect President Biden to nominate Federal Reserve Chairman Powell to another term.

November and December have usually rewarded investors. As such, we continue to suggest that investors stay close to their long-term target asset allocations with a slight defensive bias.

Best wishes for a Happy Thanksgiving!

“Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you will never, ever have enough.”Oprah Winfrey

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