The Bottom Line
● Markets threw a mini tantrum this week as speculation over tapering to the Fed’s asset purchase programs abounded. All major US and International indices finished the week in the red, Emerging Market equities took the brunt of the sell-off.
● The 2-year yield rose 2bps for the week, but the 10-year yield fell -2bps as investors searched for risk havens.
● Economic news painted a mixed picture this week, with supply chain constraints and labor shortages causing housing starts to hit a three-month low, but initial jobless claims declined for a fourth week in a row.
Are Markets Throwing A Tantrum?
Speculation surrounding the tapering of the Fed’s asset purchase programs led investors to go risk off this week and fears over the spread of the delta variant and its potential economic impact gave this move some legs, although some of the harder hit regions have reported a slow-down in hospitalizations. Markets were on pace for almost an entirely red week but were given some reprieve when the President of the Dallas Fed said his views on tapering may change, he has been in favor of starting to taper sooner rather than later. The S&P faired the best over the week, but still lost -0.59%, followed by the Nasdaq which lost -0.73% for the week. Small Caps, as measured by the Russell 2000, were down every day of the week until Friday, but Friday wasn’t near enough to bring them back to positive territory with the index tumbling -2.50% for the week. International markets were not immune to the sell-off with Japanese equities losing -3.45% for the week, now down -1.57% YTD. European equities cooled their summer rally, down -1.48% for the week, its worst week since February. China’s government continued to reign in Big Tech with more regulation, which coupled with a rising US dollar brought the Emerging Markets index down -4.31% for the week.
Digits & Did You Knows
MOVE HERE — 44 US Cities are currently offering cash incentives to attract workers to move to their cities, including, Augusta, ME ($15,660), Stillwater, OK ($7,500), and French Lick, IN ($5,000).(source: MakeMyMove.com, BTN Research).
MOST SUSCEPTIBLE — As of 08/11/21, 79% of America Covid-19 deaths occurred to individuals at least age 65, while less than 2% of the victims were under the age of 40. (source: CDC, BTN Research).
WILL IT BE AVERAGE? — The avg. change that American homeowners are anticipating in the value of their primary residence over the upcoming 12-months is a gain of +5.1%, more than the actual gain of +4.1% per year that has been achieved over the last 20-years through 4/30/21. (source: July 2021 Survey of Consumer Expectations Housing Survey, Federal Housing Finance Agency, BTN Research).
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.
Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a Registered Investment Adviser. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”).
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