The Bottom Line

● U.S. Consumer Sentiment fell to its lowest level in 11 years, dragging the NASDAQ and Russell into a negative week. The S&P and Foreign equities were able to post a positive week.
● The 10-Year and 2-year yield ebbed and flowed this week before finally settling down -2bps and flat, respectively.
● Economic news was light, but impactful, for the week with CPI numbers showing some moderation, but the PPI numbers still show signs of hot inflation. JOLTS numbers exceeded expectations, demonstrating the troubling labor markets.

Halloween in August

Friday the 13th did not spook the S&P for the week with the index up +0.71% for the week. Foreign equities posted solid gains as well with the STOXX Europe 600 up +1.25% and the Nikkei up +0.56% for the week. European equities were bolstered by French stocks, which are close to attaining a level not seen in 21 years. Small Caps and the tech heavy Nasdaq were frightened into negative territory for the week losing -1.10% and -0.09% respectively. Markets were relieved on Wednesday with CPI numbers meeting expectations, instead of surpassing them. This added ammo to the Fed’s narrative that fast-rising inflation is transitory and will begin to moderate once labor and supply chain issues resolve. However, consumers are fearing the threat of more persistent inflation with the U. of Michigan’s Consumer Sentiment survey showing deteriorating views on future economic growth, future conditions fell by -13.8 index points and current conditions only fell by -6.6 index points. The spread of the delta variant is also weighing on consumer optimism with the fear of mask mandates returning and possible future lockdowns. Corporate earnings have been accompanied with warnings that the spreading delta variant could impact bottom lines.

Digits & Did You Knows

HOME BUILDING — 563,400 single family homes began construction during the first half of 2021, the largest “January-to-June” total in the US Since the first half of 2007 or 14 years earlier.(source: Census Bureau, BTN Research).
THEY MAY NEVER STOP — The Federal Reserve has been buying$120 billion of federal debt per month since mid-March 2020, resulting in our nation’s central bank buying 76% of all the federal debt that has been issued during the pandemic. (source Federal Reserve, BTN Research).
NEED HELP — 43% of Americans under age 35 receive financial help from their parents or other family members when they purchase a home, e.g., money used for a down payment. (source: Legal & General, BTN Research

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Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.

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