Vertical-Home

The big news last week came on several fronts. First, at the close of their two-day meeting, the Fed announced, “the economy has made progress this year” and the central bank would continue to “assess progress in coming meetings.” It is expected that the Fed will begin to reduce its bond-buying program of $120 billion a month later this year. The central banks’ next meeting is September 21-22.

Second, the U.S. economy grew rapidly in the second quarter and exceeded its pre-pandemic size. GDP grew 6.5% in the second quarter compared to the 6.3% growth rate during the first three months of 2021. The down side to this is that the results came in below economists’ estimates.

Last but not least, Amazon.com’s shares fell 7.6% on Thursday after the giant online retailer reported sales slightly below analysts’ estimates. This resulted in Nasdaq ending the week down a little over 1% while the Dow Jones Industrial Average and the S&P 500 posted a loss of about 0.35%.

On the earnings front, 59% of S&P 500 companies have reported second quarter results according to FactSet. Of those companies reporting, 88% have reported earnings per share above analysts’ estimates. That’s well above the five-year average. If this trend continues for the rest of second quarter results, it will be the fourth-largest earnings surprise since FactSet started tracking the figures in 2008.

I’ll continue to keep you updated on the latest news.

If you have any questions, please contact me.

The Markets and Economy

The U.S. used car market continues to run red-hot. A limited supply of vehicles is being compounded by major auto-makers cutting back on production in response to a shortage of computer chips.
International investors are convinced America is the place to put their money. Funds from around the world are pouring into U.S. financial assets. $900 billion has flowed to U.S. domiciled mutual and exchange-traded funds in the first six months of 2021 showing confidence in our economy.
The number of existing homes for sale continues to drop. In June of 2019 there were 1.92 million existing homes for sale. In June of 2020 that number dropped to 1.54 million and as of June 2021 the slump continued with just 1.25 million existing homes on the market.
According to the Center for Retirement Research at Boston College, 12% of U.S. retirees (one out of eight) will spend at least four years in a nursing home.
Orders for cars, appliances and other durable goods rose in June showing the U.S. economy is still expanding. The numbers weren’t as strong as analysts had expected due to shortages of parts that continue to plague manufacturers.
A sharp increase in regulatory actions in China is causing concern among investors. Tech stocks and other shares in the world’s second-largest economy are experiencing sharp sell-offs as Beijing continues to exert control over how corporations operate. Hong Kong especially is feeling the brunt of China’s wrath. By the end of the week a top government regulator privately told global financial firms that Beijing will consider the market impact before introducing future policies. Only time will tell.
Between March 2020 and June 2021, 1.7 million more Americans retired than normally would have if historic trends had continued. Analysts believe the pandemic hastened retirement plans for many U.S. workers.
A record 4 million American workers quit their jobs in May, according to the Labor Dept. The numbers dipped slightly to 3.6 million in June but are still at historical highs. With a tight labor market in the U.S. workers are emboldened to seek out better opportunities.

Offices in Chicago, Kansas City, St. Louis, Naples & Valparaiso.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results.

Note: All figures exclude reinvested dividends (if any). Sources: Bloomberg, Dorsey Wright & Associates, Inc. and The Wall Street Journal. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

Securities offered through Triad Advisors, member FINRA/SIPC. Investment advice offered through Resources Investment Advisors, LLC, an SEC-registered investment adviser. Resources Investment Advisors. LLC and Vertical Financial Group are not affiliated with Triad Advisors.

David Kover on August 2nd, 2021

Prev Posts Next Posts

Market Takes A Breather