THE WEEK ON WALL STREET
Stocks prices were whipsawed last week, dragged initially lower by financial contagion worries and
later lifted by a supportive Fed policy statement. The Dow Jones Industrial Average gained 0.62%,
while the Standard & Poor’s 500 advanced 0.51%. The Nasdaq Composite index was flat (+0.02%)
for the week. The MSCI EAFE index, which tracks developed overseas stock markets, ticked
higher by 0.20%.
A WILD WEEK
Last week began with a sharp sell-off on contagion concerns that the financial difficulties of a large,
debt-laden Chinese property developer could spread to other parts of the global financial system.
This added to an existing list of worries that included Delta variant infections, slowing economic
activity, debt ceiling brinkmanship in Washington, and Fed tapering uncertainty. By mid-week
stocks bounced back strongly on news that downgraded the risk coming from China and a Fed
announcement that its bond purchases would continue, though it did anticipate a moderation in such
purchases coming soon. When the dust settled, a week that had appeared set for losses ended in
The Federal Reserve concluded its FOMC (Federal Open Market Committee) meeting last week,
announcing that it may start tapering its monthly bond purchases soon, perhaps as early as
November, and could raise rates sometime next year. Fed Chair Jerome Powell provided further
detail in a subsequent press conference, saying that bond purchases may end entirely by the middle
of 2022. The support for hiking interest rates also increased, with half of the 18 Fed officials
expecting interest rates to be higher by the close of next year, up from just seven who thought
similarly in June. The Fed also cut its GDP growth projection to 5.9%, compared with its June
estimate of 7%, while raising its inflation forecast from 3% to 3.7%.
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: Durable Goods Orders.
Tuesday: Consumer Confidence.
Thursday: Jobless Claims. Gross Domestic Product (GDP).
Friday: ISM (Institute for Supply Management) Manufacturing Index.
Tuesday: Micron Technologies, Inc. (MU).
Wednesday: Cintas Corporation (CTAS).
Thursday: McCormick & Company (MKC), CarMax, Inc. (KMX)
This week is fairly quiet and the market will most likely trade off headline news and the
nfrastructure deal working through Congress. If you ask my opinion, the infrastructure deal is a
tealth way to raise taxes as tax hikes are buried in the bill. Earnings season picks back up next
eek and the market will look for guidance from the reporting companies as to how they think their
businesses will perform in the quarters ahead.
THIS WEEK'S UPDATE
September 28, 2021|