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Market Insights

Market Update – September 18, 2021

Stocks fluctuated between positive and negative territory all week before finishing down slightly. Lingering concerns about the delta variant weighed on markets despite some positive news on U.S. inflation and retail sales. The legislative “sausage-making” process is on full display as the House works on a broad tax and spending plan that will face challenges on multiple fronts in the evenly divided Senate.


For the week, the S&P 500 Index finished down 0.6%, while the Dow Jones Industrial Average fell 0.1%. Year to date, the S&P is up 18.0%; the Dow has gained 13.0%. First-time unemployment claims increased to 332,000, mainly due to several Southern states dealing with the aftermath of Hurricane Ida. Continuing claims fell to 2.7 million, a fresh pandemic-era low. U.S. retail sales were up 0.7% in August, significantly outpacing the 1.8% decline in July and providing some evidence that a widespread slowdown in spending may not be on the horizon.


Consumer prices went up 0.3% in August, the smallest rise in seven months. This increase was less than consensus economist expectations, but still leaves prices at an elevated level compared to last year. Supply chain disruptions and higher costs for shipping, labor, and select raw materials continue to affect businesses, who are passing along a larger part of these costs to consumers. We expect consumer price pressure to ease further as inventory levels are rebuilt, pressure on ground and sea shipping costs abates, and the worker shortages in the services sector are resolved.


We made a slight shift in our allocation this week – moving two percent from emerging markets stocks towards a U.S. large cap growth investment. This is mainly in response to the current dual headwinds for emerging markets: 1) lower COVID-19 vaccination rates and 2) the continued regulatory crackdown by the Chinese government on certain industries. We feel that it is prudent to shift a portion of our allocation in light of the greater uncertainty for emerging markets. However, we remain committed to our core investing tenets of asset allocation and global diversification – of which emerging markets exposure is a key component. Our investment committee continuously analyzes key metrics along with economic data; as conditions evolve, this allows us to lean into our strongest investing convictions while building portfolios.


For more economic insights and to learn strategies for dealing with the evolving pandemic, please plan to attend our upcoming “Back to Better” webinar on Wednesday, September 22 at 12 p.m. EST. The webinar will feature noted guest speakers Jeffrey Kleintop and Patience Shutts. For more information and to reserve your spot, please click here. As always, please contact us with any questions; we are here for you every step of the way.

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