In this week’s recap: Stocks mixed as U.S. copes with economic data and Delta variant.

Weekly Economic Update

Presented by Cornerstone Financial Advisory, LLC September 6, 2021

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THE WEEK ON WALL STREET

Stocks were mixed last week amid conflicting economic data and continued spread of Delta variant infections.

The Dow Jones Industrial Average slipped 0.24% during the five trading days. But the Standard & Poor’s 500 tacked on 0.58% and the Nasdaq Composite index rose 1.55%. The MSCI EAFE index, which tracks developed overseas stock markets, gained 1.51%.^1,2,3

 

MIXED MARKET

Investors gravitated toward the high growth technology and communication services sectors, as well as the more defensive sectors, such as utilities and real estate. Reopening stocks were weighed down by Delta variant fears and a retreating consumer, while energy struggled to bounce in the wake of Hurricane Ida shutting down energy production and refining capacity.⁴

Stocks appeared to shrug off a shaky employment report on Friday, despite the questions it raised about economic growth in the months ahead.

 

MIXED EMPLOYMENT

After initial jobless claims reached a new pandemic low on Thursday, the August employment report on Friday came in below expectations as payrolls expanded by 235,000. Adding to the subdued report was a 4% decline in the number of hours worked by employees. On the positive side, the Friday report showed the unemployment rate fell to 5.2%, while wage growth rose 0.6% from July and increased 4.3% from August 2020.⁵

The weak employment report may reflect a pause in hiring due to the Delta variant. It could additionally muddy the outlook for the Federal Reserve, which has indicated it may begin tapering before year-end. The uncertain jobs picture may force the Fed to push its tapering start date into 2022.⁵

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T I P   O F   T H E   W E E K

Start a file in which you can compile your W-2s, assorted 1099s and important receipts reflecting business and health care expenses and charitable gifts.

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THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: JOLTS (Job Openings and Labor Turnover Survey).

Thursday: Jobless Claims.

Source: Econoday, September 3, 2021

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Coupa Software, Inc. (COUP), Uipath, Inc. (PATH).

Wednesday: Lululemon Athletica, Inc. (LULU), Gamestop Corporation (GME).

Thursday: Zscaler, Inc. (ZS), Affirm Holdings, Inc. (AFRM).

Friday: The Kroger Co. (KR).

Source: Zacks, September 3, 2021

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

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Q U O T E   O F   T H E   W E E K

“When things go wrong, you’ll find they usually go on getting worse for some time; but when things once start going right they often go on getting better.”

C.S. LEWIS

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T H E   W E E K L Y   R I D D L E

I can only live where there is light, but I die if the light shines on me. What am I?

 

LAST WEEK’S RIDDLE: The more you take away, the bigger I become. What am I?

ANSWER: A hole.

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Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

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This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Copyright 2021 FMG Suite.

CITATIONS:

1. The Wall Street Journal, September 3, 2021
2. The Wall Street Journal, September 3, 2021
3. The Wall Street Journal, September 3, 2021
4. ALPS Portfolio Solutions Distributor, September 3, 2021
5. CNBC, September 3, 2021