Market Commentary — September 13, 2021
The major stock indices traded down last week, in a shortened week post the Labor Day holiday. The week’s religious holiday also contributed to subdued trading volumes.
Several factors were weighing on sentiment. September has the reputation for being a week month for stocks. On Thursday, President Biden announced all large employers must require either all workers to be vaccinated or tested weekly, with vaccination being mandatory for federal workers and contractors. And while the latest evidence suggests the latest coronawave is peaking, back-to-school and Labor Day social gatherings could reverse that trend.
Friday’s reported producer price (PPI) increase in August of 0.7% sent bond yields higher along with some heavy issuance of corporate bonds and short-maturity Treasuries earlier in the week. The yield on the 10-year note rose to 1.341% and the 30-year bond ended the week at 1.933%.
The WSJ reported that Atlanta Fed President Raphael Bostic does not expect a call on tapering asset buying at this month’s FOMC meeting, but he remains upbeat about the economy, despite the surge in the pandemic.
Many economists are predicting that the Fed will begin raising interest rates next year, according to a survey by the Financial Times’ Initiative on Global Markets at the University of Chicago Booth School of Business.
ETF inflows soared past 2020’s full-year record as worldwide investor net inflows hit $834.2 billion at the end of August, according to the Financial Times. As we know, that growth is being fueled by the exodus in the US from active mutual funds. Capital Group and Federated Hermes are the latest mutual fund companies to file for actively managed ETFs.
As I write this, it is the 20th Anniversary of 9/11. As I reflect back on that day, it was a time of tragedy but also an amazing testimony to the strength of the human spirit, selfless sacrifice, and the challenges we can overcome when we are united as a people. #NeverForget
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