o

Market Insights

Market Update – October 16, 2021

Stocks overcame a mild early dip to finish higher for the week, propelled by a strong start to the quarterly earnings season and positive employment and economic data. Minutes of the most recent Federal Reserve meeting confirmed that tapering of bond purchases will almost certainly begin prior to the end of the year – a first step toward normalizing short-term interest rate policy. (Of course, the most interesting news of the week was William Shatner’s voyage into space – not as part of the USS Enterprise crew, but aboard the most recent Blue Origin flight.)


For the week, the S&P 500 Index finished up 1.8%, while the Dow Jones Industrial Average rose 1.6%. Year to date, the S&P is up 19.0%; the Dow has gained 15.3%. Unemployment claims data continued to trend positively, as first-time applications fell more than expected to a pandemic low 293,000 and continuing claims declined to 2.6 million. U.S. retail sales for September advanced more than anticipated by economists, rising 0.7% over the August level. Strong consumer balance sheets continued to provide excess discretionary savings for purchases. COVID-19 delta variant constraints have somewhat dampened spending on service industries (travel and hospitality, for example), stoking higher demand for many goods.


On the inflation front, the energy industry has taken over the “leadership” position from new and used automobile sales. Rising costs for commodities such as oil, natural gas, and coal resulting from severe disruptions in supply-and-demand dynamics are affecting worldwide markets. Even though our baseline expectation is for inflation to recede as markets revert to equilibrium, the combination of current higher prices and supply bottlenecks have the potential to restrain us from a fuller economic recovery. To learn more about our thoughts around investing in this environment, please review our Q3 investment commentary. 


Our Back to Better webinar recording is now available. It features insights from Patience Shutts, facilitator and creator of Wise Within workshop, and Jeff Kleintop, Charles Schwab’s Chief Global Investment Strategist. While Jeff and Patience have very different backgrounds, we’re pleased to offer you information on both the economy and personal well-being.


As always, please contact us with any questions; we are here for you every step of the way.

Share this Article

Ready to step into your best life?

We are ready to help.  Let's talk.