Winthrop Partners Market and Economic Update 10-18-21

The Markets (as of market close October 15, 2021)
Despite a shaky start, Wall Street enjoyed a strong week of gains. A favorable start to corporate earnings season helped lift equities higher. Each of the benchmark indexes listed here posted solid weekly gains, led by the Nasdaq and the S&P 500. The dollar and Treasury yields slipped, while crude oil prices rose 3.5% to $82.25 per barrel. Despite the generally positive week, investors will continue to keep an eye on economic data and rising prices. Higher oil, gas, and other commodity prices could raise concerns about inflationary pressures and how they could drag down corporate profit margins. Materials shortages, rising wages, and shipping bottlenecks have driven up costs for producers. Many have passed these costs on to consumers, leading to more persistent inflation. Initial earnings data comes from banks and financial institutions. The next few weeks will see earnings reports from the bulk of companies in most sectors and may reveal the impact that inflation and supply demands has had on earnings margins so far in the third quarter.
Monday was the Columbus Day and Indigenous Peoples’ Day public holidays but stock markets were open and bond markets were closed. The Dow and the S&P 500 fell 0.7%, while the Nasdaq and the Russell 2000 dipped 0.6% on what was a fairly slow trading day. Crude oil prices rose 1.5% to reach $80.51 per barrel, a multi-year high. Investors may be waiting for the next round of corporate earnings data to weigh the potential impact of rising energy prices, labor costs, and supply-chain bottlenecks.
Stocks fell again last Tuesday. Only the small caps of the Russell 2000 ended the day in the black, gaining 0.6%. The Global Dow (-0.4%), the Dow (-0.3%), the S&P 500 (-0.2%), and the Nasdaq (-0.1%) declined. Ten-year Treasury yields dipped below 1.6%, closing the day at 1.58%. Crude oil prices were little changed, while the dollar advanced 0.2%. Consumer discretionary, real estate, and utilities led the market sectors, while communication services, information technology, and health care declined by at least 0.5%.
Equities rose for the first time in four sessions last Wednesday. With inflationary pressures continuing to run hot (see Consumer Price Index information below), technology shares increased, as investors seemed to focus on companies better able to pass on higher costs to consumers. The Nasdaq led the surge, climbing 0.7%, followed by the Russell 2000 and the S&P 500, which climbed 0.3%. The Dow and the Global Dow
broke even on the day. Treasury yields, crude oil prices, and the dollar declined. Among
the market sectors, utilities (1.1%) and information technology (0.6%) advanced, while
financials dipped 0.6%.
Stocks rallied last Thursday, buoyed by strong bank earnings reports and encouraging
unemployment data. Each of the benchmark indexes listed here gained at least 1.0%,
led by the Nasdaq and the S&P 500, which added 1.7%. The Dow gained 1.6%, the
Russell 2000 climbed 1.4%, and the Global Dow advanced 1.1%. The dollar and Treasury
yields eased for the second consecutive day, while crude oil prices rose to $81.53 per
barrel. Materials and information technology gained 2.4% and 2.3%, respectively, to lead
the market sectors.
The market advanced for the third consecutive day last Friday. Strong earnings data and
stronger-than-expected retail sales provided encouragement for investors. The Dow
advanced 1.1%, followed by the Global Dow (0.9%), the S&P 500 (0.8%), and the Nasdaq
(0.5%). The small caps of the Russell 2000 slipped 0.4%. Ten-year Treasury yields
climbed 3.8%, crude oil prices rose 1.2%, while the dollar was little changed. The market
sectors closed Friday generally higher, with consumer discretionary (1.8%) and
financials (1.5%) leading the pack.
The national average retail price for regular gasoline was $3.267 per gallon on October
11, $0.077 per gallon more than the prior week’s price and $1.100 higher than a year
ago. Gasoline production increased during the week ended October 8, averaging 9.6
million barrels per day. U.S. crude oil refinery inputs averaged 15.1 million barrels per
day during the week ended October 8 — 700,000 barrels per day less than the previous
week’s average. Refineries operated at 86.7% of their operable capacity, down from the
prior week’s level of 89.6%. For the complete article click here: Winthrop Partners Market and Economic Update 10-18-21