After contently watching domestic equity markets hover near all-time highs during most of the third quarter, markets eventually
succumbed to rotating concerns resulting in the S&P 500 pullback of 4.76% during the last month of September. As we remain
confident in market levels supported by fundamentals, we reiterate that such a minor pullback is healthy for overall markets as
we continue forward with our post pandemic recovery. As expected, the Dow Jones Industrial Average has stayed within a
recent trading range of 34,000 to 35,500 absent a major catalyst to drive a breakout in either direction. We continue to observe
consistent patterns of respective buying and selling at both ends of the support & resistance spectrum.
Energy and Financial sectors continue to lead overall markets during 2021, meeting our expectations, with Real Estate rounding
out the top three. The Utility sector remains a disappointment relative to our outlook for this year. After recently reaching double
digit year to date (YTD) returns, the Utility sector gave up a good portion of its gains when bond markets reacted negatively to
further hawkish Fed feedback and inflation red flags. Even though 2021 YTD total return results for the Utility sector remain
unimpressive, it still serves a role as an attractive income generating vehicle with defensive characteristics. Also note that during
the downturn in September, Value oriented companies held up better than Growth stocks, -3%+ versus -5%+, respectively.
As discussions regarding proposed tax law changes and the infrastructure spending bill blur into the D.C. background, inflation
fought its way back to the spotlight with support from significantly higher oil prices. With inflation taking the lead role, we saw the
yield on the 10-year Treasury rise over 1.5%, recently touching 1.6% before pulling back. Inflation sustainability remains a
question due to trendless economic reports, especially employment data.
Understanding employment reports today is likened to understanding why your keys are always in the pocket on the side where
you are holding bags. Note: there is a sub-conscious answer to this mystery. A combination of job creation reports, filing of new
unemployment claims and labor shortage issues presents a challenging new environment for analysis. I just do not recall any
continuing education curriculum within our industry that covers “making logic out of illogical results.” Another persistent
contributing factor to inflation is the existing global supply issue. We believe supply constraints should slowly resolve itself
through 2022 via increased manufacturing and resolution of labor shortages in the transportation sector.
Please note that our next Virtual Round Table Discussion (RTD) has been scheduled for November 10th from 3:00 PM – 4:00
PM. We will be holding in-depth discussions regarding inflation, interest rates, impact of Evergrande as another contagion from
overseas, the national labor shortage/strike, updates on proposed tax law changes/infrastructure bill and other topics. RTD
attendance details are currently being sent out to individuals on our invitee list. If you are interested in participating, please
contact your adviser or Katelyn Baehrle in our main office at 484-320-6300 to be included. Finally, please be sure to reach out to
your adviser should you have any questions pertaining to your personal financial plan or investment portfolio.
It is remarkable that we have already moved through the first half of 2021, and yet, the passage of time appears to be moving slowlyas we continue to monitor economic indicators for clarification on the global path of recovery. Two persistent issues remain at...
Equity markets continued their march upward during the first quarter of 2021 supported by economic hope and a recovery in corporatefundamentals. As we move along the vaccination timetable, a sense of light at the end of the pandemic tunnel becomes morepalpable even...
Market resilience was a pleasant surprise during 2020 after falling off a cliff in the first quarter. The sense of a bottomless pit was driven by overwhelming uncertainty associated with the introduction of COVID-19. The recovery in market levels was a positive sign...
The third quarter can be described as “bittersweet” as markets approached all-time highs before backing off in a healthy manner. It was reassuring to see how market resilience benefitted client portfolio values, but as markets continued to climb without regard to any...
We moved through the second quarter as observers watching economic history unfold as COVID-19 initiated the shutdown of all non-essential businesses. This resulted in an initial unemployment claims figure that did not even come close to any street projections. The...
After hitting all-time highs in February, U.S. equity markets abruptly turned for the worst as discerning news emerged regarding the novel coronavirus. In over a month, the Dow Jones Industrial Average (DJIA) dropped from a record high of 29,500+, to a 52-week low of...