The biggest news of last week came when, at “long last,” the Food and Drug Administration (FDA) gave full approval of Pfizer’s COVID-19 vaccine. Despite the relatively fast pace with which the approval was granted, the market responded in hopes that more Americans will now seek out vaccination. The tech-heavy Nasdaq Composite index outperformed the broad market S&P 500 Index and the large-cap Dow Jones Industrial Average. The Russell 2000 Index of small-cap stocks posted particularly impressive gains. Stocks in the energy sector jumped higher, as crude oil prices gained about 10% for the week. Trading volumes were generally very light, as is typical for late summer.
Good news on the pandemic front was tempered by the attack at the Kabul airport in Afghanistan amid the U.S. military’s withdrawal from the country. Additionally, speeches by three regional Federal Reserve (Fed) presidents expressing support for a faster start to tapering the central bank’s bond purchases also weighed on sentiment.
With the Fed on the mind of many, Friday’s speech by Fed Chair Jerome Powell at the Kansas City Fed’s Jackson Hole conference (held virtually for the second consecutive year) was highly anticipated. In the end, the speech turned out to be a nonevent (and positive for short-term market performance), as Powell did not signal any deviation from the central bank’s recent assessment of economic conditions or outlook for removing policy accommodation.
Other economic data released last week included July existing home sales rising 2% from June, a slightly higher increase than consensus expectations. This is likely because of more inventory available within the housing market. July new home sales were up 1% from June, but down 27% from July 2020. Weekly initial jobless claims ticked up, but remained near their lowest levels of the pandemic, indicating that the labor market is still strengthening even as the Delta variant spreads in the U.S.
The events of the past two years, most circling around the pandemic, have certainly tested our collective patience. The Lord teaches us to be patient when the days turn into months and then into years (2 Peter 3:8). The Rolling Stones (whose drummer, Charlie Watts, died last week) also remind us that “Time is On (Our) Side.” With Moderna next in line to seek FDA approval and vaccine boosters entering the mainstream, perhaps the “time” has finally come to see this pandemic end. If it lingers, however, we pray for continued patience and a sense of appreciation for days we are blessed with (Psalms 90:12). The heart of wisdom that results will be well worth the wait.
Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights
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