Weekly Economic Update: September 20th, 2021

Presented by Nicholas Wealth Management

September 20th , 2021

Weekly Market Update

In this week’s recap: Despite signs of a good economy, stocks have a lackluster week.

The Week on Wall Street

Stocks weakened ahead of this week’s Federal Reserve meeting and amid persistent concerns about the Delta variant’s impact on the economy.

The Dow Jones Industrial Average was flat (-0.07%), while the Standard & Poor’s 500 fell 0.57%. The Nasdaq Composite index lost 0.47% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.65%.1,2,3

Stocks Struggle

Despite a string of economic reports painting a healthy picture of the U.S. economy, investor sentiment remained cautious. While tamer inflation and higher-than-expected retail sales may typically be constructive for the market, any investor enthusiasm it generated was fleeting.

The market appeared all week to be encumbered by a tentative, apprehensive mood. The Delta variant remained an overhang, but it was more than that. Investors appeared concerned about September, which historically has been a weak month for stock prices. The market also was concerned about fiscal and tax policy proposals emanating from Washington D.C., news of an economic slowdown in China, and by what the Fed may announce following its September 21-22 Federal Open Market Committee meeting.

Taking the Economic Pulse

A series of economic reports released last week provided investors with a broad snapshot of the state of the economic recovery.

Inflation showed signs of moderating, rising 0.3%—an elevated rate, but well below June and July’s increases of 0.9% and 0.5%, respectively. The consumer remained strong as retail sales rose 0.7%, an unexpected jump. Manufacturing reached pre-pandemic, while the labor market continued its recovery, with initial jobless claims coming in near pandemic lows and continuing claims hitting a new pandemic low. 4,5,6,7

Tip of the Week

Media

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[yotuwp type="videos" id="CaToiSmFDnU" ]

One of the most common questions David gets asked is if inflation will be temporary. The Democrats' $3.5 trillion spending plan may turn inflation from a threat to a government policy. David Nicholas joined Stuart Varney on Fox Business last Friday, 9/17, to discuss why he's not convinced inflation is temporary. Click to watch!

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CITATIONS:

1. The Wall Street Journal, September 17, 2021

2. The Wall Street Journal, September 17, 2021

3. The Wall Street Journal, September 17, 2021

4. CNBC, September 14, 2021

5. The Wall Street Journal, September 16, 2021

6. MarketWatch, September 16, 2021

7. The Wall Street Journal, September 16, 2021