THE WEEK ON WALL STREET Stocks turned lower last week amid the increasing probability of a Fed tapering, mixed economic data, and growing concerns about the economic impact of the Delta variant. The Dow Jones Industrial Average slumped 1.11%, while the Standard & Poor’s 500 lost 0.59%. The Nasdaq Composite index slipped 0.73%. The MSCI EAFE index, which tracks developed overseas stock markets, surrendered 2.94%.
After the Dow Industrials and S&P 500 index climbed to new record highs to begin the week, stocks pulled back amid weaker-than-expected retail sales, festering concerns about the Delta variant, and slowing growth in China. The stock market retreat accelerated mid-week with the release of the FOMC (Federal Open Market Committee) meeting minutes, which signaled that Fed officials may be ready to begin reducing its monthly bond purchases before the end of the year. Stocks managed to stabilize on Friday, paring some of the week’s losses. Consumer staples, health care, real estate, and utilities were the top-performing groups. Two weeks ago, multiple regional Federal Reserve Bank presidents suggested that the economy was strong enough to justify tapering the Fed’s monthly bond purchases. Last week, that chorus grew a bit louder with the release of minutes from July’s FOMC (Federal Open Market Committee) meeting. The precise timing was left undecided, with some officials believing it should begin before year-end, while others thought waiting until the start of the new year was the better choice. Monday: Existing Home Sales.PMI (Purchasing Managers’ Index) Composite Flash. Tuesday: New Home Sales. Wednesday: Durable Goods Orders. Thursday: Jobless Claims. Gross Domestic Product (GDP). Friday: Consumer Sentiment. Monday: JD.com, Inc. (JD), Palo Alto Networks, Inc. (PANW). Tuesday: Best Buy Co. (BBY), Intuit, Inc. (INTU). Wednesday: Salesforce.com (CRM), Ulta Beauty, Inc. (ULTA), Autodesk, Inc. (ADSK). Thursday: Marvell Technology, Inc. (MRVL), Workday, Inc. (WDAY), Dollar Tree (DLTR), Dell Technologies (DELL), VMware, Inc. (VMW), Peloton Interactive, Inc. (PTON). While the media may not report it, there is some good news on the horizon. New Covid cases in Florida are beginning to roll over. Very little has been done at the state level to mitigate spread of the virus. It took 40 days for cases to peak which may be a good model for the rest of the country. Beyond Covid, watch for news from the Fed’s Jackson Hole symposium this week. They decided to hold it virtually this year because of the Delta variant, so many think they will be sensitive to the new cases popping up around the country and be less motivated to taper interest rates sooner rather than later. Stay tuned…
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THIS WEEK'S UPDATE
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August 24, 2021
