Weekly Snapshot August 27th, 2021
Market Review: Week Ending 8/27/2021
Despite the spreading delta variant, the markets continue to be driven by strong corporate earnings expectations and progressing economic growth. For the week, the equity markets rebounded and traded higher. The Dow Jones Industrial Average (DJIA) rose 0.98%, the S&P500 Index (S&P500) increased 1.54%, while the NASDAQ Composite (NASDAQ) advanced 2.82%. Leading the markets higher was the small-cap Russell 2000 Index (R2000), jumping 5.06%.1 This week, fresh record highs were set by both the S&P500 and NASDAQ. Reversing last week’s decline, oil prices and Energy stocks recovered as domestic demand reached pre-pandemic levels.2 S&P 500 sector outperformers were Energy +7.34%, Financials +3.47%, and Telecomm Services +2.80% while sector underperformers were Utilities -2.11%, Consumer Staples -1.36% and Healthcare -1.18%.3 The Russell 1000 Growth Index (+2.08%) and Russell 1000 Value Index (+1.55%) had positive returns for the week. Growth continues to outperform value for the quarter but still trails year-to-date (20.19% versus 20.72%).4
The markets reacted positively to Chairman Powell’s speech at the Federal Reserve Jackson Hole conference last week. Chairman Powell confirmed the bond purchasing program would slow later this year; but emphasized that the Federal Reserve would not rush into a tight monetary policy in response to transitory inflation.
On a side note, looking at Wall Street strategists and their year-end 2021 target prices reveals an interesting spread. On the positive side, Wells Fargo’s Chris Harvey just raised his target price for the S&P500 to a street-high 4,825 (+7% higher than the current level) while Morgan Stanley’s Mike Wilson maintained his year-end target of 4,000 (-11% lower than the current level)5
On the political front, House Democrats were able to pass the massive $3.5 trillion budget resolution increasing funding for climate change, education, healthcare, and childcare. However, concerns about how large the tax increases will be needed to “pay” for the spending has the budget in limbo on the Senate Congressional side.
WHAT WE WILL BE WATCHING THIS WEEK
Various economic reports on the health and direction of the economy:
- Institute for Supply Management’s Manufacturing Index
- Institute for Supply Management’s Non-Manufacturing Index
- Nonfarm Payrolls and Unemployment – U.S. Bureau of Labor Statistics
As always, we appreciate your confidence in our team.
Fundamentum Investment Committee
John Nichol, CFA® – Chief Investment Officer
Trevor Forbes – Investment Committee
Robert Armagno – Investment Committee
1 JPMorgan Weekly Market Recap – 8/30/2021
2 John Hancock Weekly Market Recap – 8/27/21
3 FactSet – 8/27/2021
4 JPMorgan Weekly Market Recap – 8/30/2021
5 FactSet – 8/27/2021
Investment advice offered through Fundamentum LLC a registered investment advisor. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no assurance that the investment objective of any investment strategy will be attained. Investing involves risk including loss of principal. Past performance is no guarantee of future performance. All indices are unmanaged and may not be invested into directly.