Awaiting Promises

Post On: November 30, 2021

Posted In: Market Update

Stocks declined for the holiday-shortened week, after Friday’s news about the emergence of a new, potentially more contagious, coronavirus variant in South Africa — Omicron. Before the Thanksgiving holiday, information technology stocks suffered, as rising Treasury yields made expected corporate profits far in the future less valuable in today’s terms. Yields then decreased on Friday amid the flight to assets viewed as safe havens due to the Omicron variant. Value stocks held up better than growth companies, despite Friday’s selling pressure on stocks related to leisure and travel.

 

The reappointment of Jerome Powell coupled with comments from members of the Federal Open Market Committee (FOMC) about the potential to accelerate the tapering of the Fed’s bond purchases contributed to the less-dovish outlook for Fed monetary policy, which helped push Treasury yields higher. The minutes from the November FOMC meeting, released on Wednesday, also showed that some policymakers advocated for an even quicker taper. These comments may be signaling the Fed’s concerns surrounding looming inflation.

 

President Biden formally announced that the U.S. will release oil from the Strategic Petroleum Reserve to try to pressure gasoline prices, which are a key part of headline consumer price inflation figures, lower. Oil prices actually rose on the news, which was widely anticipated, as the market seemed to think that the Organization of the Petroleum Exporting Countries and Russia (known as OPEC+) will simply reduce its production to offset the move.

 

Fluctuation in oil continued, however, as news of the Omicron variant sent the price of West Texas Intermediate crude oil, the U.S. benchmark for the commodity, plummeting more than 10% on fears that the new variant will damage demand for oil.

 

In a very mixed week, positive economic data—including the lowest level of weekly jobless claims since 1969—helped drive the early week increase in Treasury yields. The increases were particularly meaningful in short- and intermediate-term maturities. This trend ended abruptly on Friday, as investors fled to lower-risk assets amid fears that rising coronavirus cases could lead to renewed lockdowns and economic downturns.

 

Entering the Advent season, we await two promises – the birth of our Lord and Savior, as well as His promised return. The uncertainty in both the markets and in society, in general, often make waiting for anything a very anxious proposition. Proverbs 17:22 reminds us that the joy, hope and contentment that comes from the indwelt Holy Spirit is all we need during times like this (“A joyful heart is good medicine, but a crushed spirit dries up the bones”). Keep your spirits up!

 

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.
This material is for informational purposes only. Neither APFS nor its Representatives provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions. Information has been obtained from sources believed to be reliable and are subject to change without notification. The information presented is provided for informational purposes only and not to be construed as a recommendation or solicitation. Investors must make their own determination as to the appropriateness of an investment or strategy based on their specific investment objectives, financial status and risk tolerance. Past performance is not an indication of future results. Investments involve risk and the possible loss of principal.

Recent Posts

The Power of Positive Thought

The S&P 500 Index recorded its best weekly gain since February, as fears seemed to abate about the new Omicron variant of the Coronavirus. Most of the benchmarks moved near […]

Read More
Christmas Client Appreciation Event 2021

Thank you to the 1,400 clients who came out to see Steven Curtis Chapman live at our Christmas Client Appreciation Event on Tuesday, December 7. Christmas is All in the […]

Read More


Let our professional financial advisors help you achieve the legacy you desire for yourself, loved ones, and organizations. Contact Us