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- Stocks were positive across the board last week. We saw both global markets (represented by the MSCI All Country World Index) and domestic stocks (represented by the S&P 500 Index) up 1%. It was emerging markets (represented by the MSCI Emerging Markets Index) leading the way up 1.2%.
- The big economic news of the week came from the Friday jobs report. The economy added 943,000 new jobs, lowering the unemployment rate down to 5.4%. Additionally, average hourly earnings rose 4% year-over-year.
- Lawmakers in the Senate moved closer to a vote to pass the $1 trillion infrastructure bill. The bipartisan bill has become a top priority and is another large round of fiscal stimulus.
- In economic data news this week, eyes will be on the Consumer Price Index on Wednesday. Inflation concerns have dominated financial headlines over the past few months. Last month’s report showed a 5.4% inflation rate for the year ending in June.
- After nearly two months above $70 per barrel, oil prices had a rough week dropping down around $68 per barrel. Concerns over global demand amid the delta variant is the primary culprit.
- We’ve said for a couple months that we see markets as still having room to run, but expect it will be rather choppy given lofty valuations and the optimism priced into stocks. During market recoveries, it’s very normal to see pullbacks as markets get ahead of themselves and then continue their push forward. For example, from the market bottom on 3/9/2009 (during the financial crisis) through 4/26/2010, the MSCI All Country World Index rose a cumulative 86.8%. Over the next month and a half, economic concerns pulled the same global equity market down -14.7%. These types of market gyrations are normal and it requires patience on the part of investors.
- I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
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