Weekly Economic Update: August 23rd, 2021

Presented by Nicholas Wealth Management

August 23rd , 2021

Weekly Market Update

In this week’s recap: A Fed taper may loom; economic data mixed.

The Week on Wall Street

Stocks turned lower last week amid the increasing probability of a Fed tapering, mixed economic data, and growing concerns about the economic impact of the Delta variant.

The Dow Jones Industrial Average slumped 1.11%, while the Standard & Poor’s 500 lost 0.59%. The Nasdaq Composite index slipped 0.73%. The MSCI EAFE index, which tracks developed overseas stock markets, surrendered 2.94%.1,2,3

Unsettling News

After the Dow Industrials and S&P 500 index climbed to new record highs to begin the week, stocks pulled back amid weaker-than-expected retail sales, festering concerns about the Delta variant, and slowing growth in China.

The stock market retreat accelerated mid-week with the release of the FOMC (Federal Open Market Committee) meeting minutes, which signaled that Fed officials may be ready to begin reducing its monthly bond purchases before the end of the year. Stocks managed to stabilize on Friday, paring some of the week’s losses. Consumer staples, health care, real estate, and utilities were the top-performing groups.4

Taper By Year End

Two weeks ago, multiple regional Federal Reserve Bank presidents suggested that the economy was strong enough to justify tapering the Fed’s monthly bond purchases.

Last week, that chorus grew a bit louder with the release of minutes from July’s FOMC (Federal Open Market Committee) meeting. The precise timing was left undecided, with some officials believing it should begin before year-end, while others thought waiting until the start of the new year was the better choice.5

Tip of the Week

The fine print on a lease or a mortgage is always worth reading. Ask the business owners and homeowners who have learned this from experience.

Media

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Afghanistan is a defining moment for US foreign policy. Nations like China are watching closely how we act in this moment. This has potentially huge implications for global order. David Nicholas joined Neil Cavuto on Fox Business last Monday 8/16, to discuss how global instability could negatively affect the U.S. consumer.

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CITATIONS:

1. The Wall Street Journal, August 20, 2021

2. The Wall Street Journal, August 20, 2021

3. The Wall Street Journal, August 20, 2021

4. ALPS Portfolio Solutions, August 20, 2021

5. Reuters.com, August 19, 2021