November Finishes with Omicron-Driven Volatility
- In the final week of November, stocks were mostly negative across the board. We saw both global markets (represented by the MSCI All Country World Index) and domestic stocks (represented by the S&P 500 Index) down -1.2%.
- Below are figures for the month of November and year-to-date through the end of the month:
|*as of 11/30/2021||November||YTD|
|MSCI All Country World Index (Global Stocks)||-2.4%||14.0%|
|Barclays U.S. Aggregate Bond Index||0.3%||-1.3%|
|Barclays Municipal Bond Index||0.9%||1.4%|
- Once again, the Federal Reserve and their rhetoric are responsible for some of the market volatility. During his congressional testimony last week, Fed Chair Jerome Powell indicated that the Fed is a little worried about inflation and that they could, as a result, accelerate their asset tapering process. As a reminder, the plan was to taper their bond purchases (which means they are buying less and less) over the next six months or so.
- In a move that was a little under the radar, the Senate approved a bill to fund the government through February of next year. That move avoids a shutdown for the time being. The focus now turns to the debt ceiling, which once again must be dealt with.
- While below expectations, the labor market report last week showed 210,000 new jobs in November. The unemployment rate also dropped, falling from 4.6% down to 4.2%. Below is a good illustration from CNBC and the Bureau of Labor Statistics showing the initial jobs falloff from the pandemic and the methodical recovery over the last 18 months. While still below the level pre-pandemic, the job market has continuously improved over time.
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.