Information Overload?

Post On: November 23, 2021

Posted In: Market Update

The major indices ended the week mixed, as investors weighed strong economic and profits data against inflation fears, ongoing supply strains, and a rise in coronavirus infections in some regions. Growth stocks handily outpaced value stocks, helping lift the Nasdaq Composite to another record intraday high on Friday. Sector returns also varied widely within the S&P 500 Index. A solid gain in Amazon.com shares and a partial rebound in Tesla boosted consumer discretionary stocks, while strength in Apple supported information technology shares. Energy stocks dropped alongside oil prices, after China and the U.S. discussed releasing strategic reserves and U.S. inventories rose for the first time in five weeks. Financials were also weak. Market activity was generally subdued, with Thanksgiving week here.

 

Several signs that the economic expansion was regaining momentum seemed to support sentiment early in the week. On Tuesday, the Commerce Department reported that retail sales jumped 1.7% in October, the biggest gain since March, while September’s increase was also revised higher. Although inflation was partly behind the increase—sales at gas stations rose 3.9%, for example—it appears early holiday shopping was also at work. Industrial production in October also rose much more than expected (1.6% versus around 0.7%), and current measures of manufacturing activity in the New York region are outpacing estimates.

 

Wall Street seemed to be on the lookout for the announcement of the next Federal Reserve (Fed) Chair, waiting to see if Joe Biden would reappoint current Chair Jerome Powell or, instead, promote Fed Governor Lael Brainard, who is widely viewed as among the most “dovish” of Fed officials. Although Powell remains, many viewed the possibility of Brainard’s appointment as having weighed on financial shares by lowering interest rate expectations and, therefore, banks’ lending margins (some also believed that Brainard would have pursued more stringent bank regulations).

 

U.S. Treasury yields ended Thursday little changed relative to last week’s levels, but decreased Friday morning on concerns that Germany could follow Austria in implementing another nationwide lockdown to fight COVID-19. The Treasury rally was broad-based along the yield curve, suggesting that investors expect the Fed to take a somewhat more patient approach toward rate hikes amid potentially slower economic growth.

 

As we continue to watch the interplay between the Fed’s musings and the very real signs of inflation in the economy, the pending passage of the Build Back Better Act must also garner some attention. The perceived implications of the Act on the Tax Code and, as such, taxpayers, has already reached a fevered pitch, and where the legislation lands could cause the markets to tilt for a time (further up or down). We’ve got our eyes on a lot of information, this time of year, and all of it has weight.

 

Thanksgiving is upon us, and despite the complexities and seemingly unimportant factors that often influence the economy and the markets, we remain thankful that it is all part of God’s perfect plan. “Give praise to the Lord, proclaim his name; make known among the nations what he has done, and proclaim that his name is exalted. Sing to the Lord, for he has done glorious things; let this be known to all the world” (Isaiah 12:4-5). Happy Thanksgiving!

 

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 Tide Could Be Turning

Stocks retreated from record highs, last week, as investors confronted data showing the highest inflation in three decades. On Tuesday, the S&P 500 Index registered its first decline in nine […]

Read More
Planning Next Steps

Stocks posted impressive weekly gains, as a relatively dovish Federal Reserve policy meeting, healthy economic data, and a strong tail end to the earnings season all boosted sentiment toward equities. […]

Read More


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