06|22|2021

A Market Pummeling | June 18, 2021

AUTHOR: Jason J. Roque, MS, CFP®, APMA®, AWMA®
TITLE:       Investment Adviser Rep – CCO
TAGS:   S&P 500, Oil, Inflation, Jobs, COVID

It was a pummeling this last week on the markets. Interest rates fell and markets did as well, will it continue?

Monday

Novavax announced efficacy data that shows over a 90% rate. Had this been released in November it would have contributed to a market rally. In a ‘good news is bad news’ environment; markets were down most of Monday. They climbed in the last few minutes of trading to end the day in the green.

Tuesday

Inflation indicators signaled more on the horizon. Additionally, retail sales came in weak. In a shift in mentality, this data although bad news, actually caused a negative day on the markets.

Wednesday

Markets fell on Wednesday as the Federal Reserve Bank (FRB) showed indication that rates may raise sooner than previously announced. It wasn’t a dramatic shift as they are still likely on hold until 2023. This created tension in markets as higher rates spell lower profits for corporations.

Thursday

The S&P 500 was steady after a volatile Wednesday. This was surprising as initial jobless claims rose for the first time since the beginning of April. This sign does not bode well for re-opening. Markets however are enjoying that data. So much of re-opening has been priced in that slower opening data has actually been welcomed.

Friday

Markets tumbled on Friday heading into the weekend. This seemed to be a continuation of the negative tone all week. Mainly spurred on by the more hawkish tone of he FRB.

Conclusion

The S&P 500 lost 1.91% across the week. The adjustment that the FRB made to their forecast, while large, was expected. Likely the concern is that no one expected it as of yet. The next major checkpoint to watch for the FRB would be their annual meeting in Jackson hole (August).

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