THE WEEK ON WALL STREET
The stock market powered to record levels last week amid talk of Fed tapering and
a deceleration in new Delta variant cases. The Dow Jones Industrial Average gained
0.96%, while the Standard & Poor’s 500 increased 1.52%. The Nasdaq Composite
index led, picking up 2.82%. The MSCI EAFE index, which tracks developed overseas
stock markets, rose 1.39%.
Stocks surged to begin the week as investor sentiment improved on news of the
FDA’s approval of its first COVID-19 vaccine, a strong housing number and
comments by the Federal Reserve Bank-Dallas president that he would support
delaying tapering if the Delta variant spread worsened. Stocks continued their
climb through midweek, pushing the S&P 500 to another record high and the
NASDAQ Composite above 15,000 for the first time. The S&P 500 and NASDAQ
Composite closed the week at record highs following Fed Chair Powell’s comments
that Fed is likely to begin winding down its monthly bond purchases (aka tapering)
by year-end, though no interest rate hikes were imminent.
At last week’s Jackson Hole Economic Policy Symposium, Fed Chair Jerome
Powell’s speech on Friday provided further insights into Fed plans to begin tapering.
Powell said that the Fed may likely commence tapering prior to year-end, adding
that the wind down of bond purchases should not be seen as a signal for future rate
hikes. Powell emphasized that labor market conditions remain short of the Fed’s
target for maximizing employment. He also reiterated his case for why inflation
remains a transitory phenomenon. With a number of Regional Federal Reserve
Bank presidents already supportive of tapering, investors may see more definitive
steps coming out of next month’s FOMC (Federal Open Market Committee) meeting.
Tuesday: Consumer Confidence.
Wednesday: ISM (Institute for Supply Management) Manufacturing Index. ADP
(Automated Data Processing) Employment Report.
Thursday: Jobless Claims. Factory Orders. (Institute for Supply Management)
Monday: Zoom Video Communications, Inc. (ZM).
Tuesday: Netease, Inc.. (NTES), Crowdstrike Holdings (CRWD).
Wednesday: Okta, Inc. (OKTA).
Thursday: Broadcom, Inc. (AVGO), MongoDB, Inc. (MDB), Docusign, Inc. (DOCU).
Covid is ripping though the country at a violent pace. The silver lining is that the
number of new cases has peaked in several states showing an average of around 45
days to peak before the number of cases begins to subside. While we aren’t out of
the tunnel just yet, we can see the light at the end. As we’ve mentioned before, the
lion’s share of those getting sick are the unvaccinated. Sure, a very small percentage
of vaccinated have still gotten sick, but a very low number of those need hospital
care. We track this stuff daily and not with numbers from any media source. We
get our numbers from an unbiased source and the facts are what they are. This has
become a pandemic mostly of those without antibodies. However, those who have
chosen not to receive antibodies from a vaccine are getting them the old-fashioned
way, they are getting sick. Really sick in some cases even leading to death. I’ve
heard all kinds of conspiracy theories about vaccines and some who say it’s just not
natural. Well, it is natural to get sick and die at some point, but I don’t see too many
ridiculous measure. This is America and everyone has a choice. A choice to be
vaccinated or not and a choice for businesses and public institutions to determine
whom they will and won’t serve based on their policies. As a kid, there was a little
convenience store I went into a lot. It was near our house, and it was an easy place
to stop in for milk or a candy bar, etc. If I remember correctly, it was called the Jiffy
Store. Anyway, they had a sign on the door that read “No shoes, no shirt, no
service.” I often wondered who would ever go into any store without the
forementioned shoes or shirt, but apparently someone did, or they wouldn’t need a
sign. As you might expect, I never saw anyone in there without shoes or a shirt. I
said all that to say this, people have become way too sensitive and allowed the media
to bias their thoughts on how they think of this pandemic. They say, “I won’t carry
a card to get into a restaurant or business or to travel!” Well, they don’t have to
grace that establishment or location. One has to carry a card to drive as it is a
privilege. They can choose not to have that little card, they just can’t legally drive
without it. Whether someone is vaccinated or not is immaterial to me. I don’t want
anyone to get sick or worse, but I respect people’s choices as an American. I say we
should respect each other, whether it be a friend or business that has chosen one
stance or another. Just because one has a different thought or point of view it
doesn’t make them an enemy.
or just oneself. It isn’t right just part of the time either. It is a law. It isn’t a
suggestion that 2+2=4. It is, and there is no other interpretation. Humans
(especially the media) can try and pervert Math to their own agenda like some do
with religion. I didn't coin the phrase “There are lies, damn lies and statistics,” but
I wish I had. At the end of the day, when you take away an agenda Math will always
stand on its own. It is beautiful that way. And, like it or not Math has already made
its opinion known about whether vaccines are for the greater good or not. We don’t
need the media (this includes social media) to tell us as a society how to think about
a subject. If you want the facts, follow the math. I mean, if you listened to the
talking heads on the stock market, you’d sell everything based on one guest’s
opinion and buy it all back based on the next “expert.” Spinning one’s wheels and
getting nowhere is not productive whether it involves your health or your money.
Moving forward and making the best of any situation is productive. File this in
the “For What It’s Worth” file.
the rearview mirror, economic reports will once again take center stage. Consumer
confidence data comes out tomorrow and the ISM number will be released on
Wednesday. The big news, however, will be Friday's monthly jobs report. As Covid
moves through Americans will still go out and spend money. This drives the
economy. There will be bumps along the way, but we will make the most of it and
move forward. That’s what we do.
THIS WEEK'S UPDATE
August 31, 2021|