The Bottom Line
● U.S. Equities shrugged off a miss on GDP and mega cap tech earnings disappointments and the S&P 500 and Nasdaq set fresh highs.
● The yield on 2-year treasuries popped +5bps for the week, but the 10-year yield fell -7bps.
● The week was a flurry of economic releases, with GDP and Personal Income coming in softer than expected. FHFA House Price Index was also below estimates, but New Home Sales came roaring back and Consumer Confidence showed some signs of strengthening. Focus will likely shift to next week’s FOMC Rate Decision meeting and employment releases.
Mega Tech Earnings Miss Doesn’t Spook Markets
Despite Q3 GDP coming in softer than expected and both Amazon and Apple, two of the U.S.’s largest companies, missing earnings’ expectations, markets pushed higher for the week, especially towards the end of Friday’s trading session when the FDA announced approval of a COVID-19 shot for young children (ages 5-11). The S&P 500 logged a healthy week up +1.33% and set an intraday and new closing high. The Nasdaq posted a very strong week, up +2.71% and was also able to eke out a record high as well. Small caps were more muted for the week, but the Russell was still up+0.26%. International markets were also in the green for the week, but more tepid than domestic indices. The STOXX Europe 600 was up +0.77% and the Nikkei-225 was modestly up +0.30% for the week. With trading sessions for the month of October officially in the books, market participants will begin to shift their focus to economic releases coming out next week. The Fed is expected to announce a start date for the tapering of asset purchases at the FOMC Rate Decision meeting next Wednesday and official government employment data is set to be released on Friday.
Digits & Did You Knows
YOU KNOW WHY – 35 million Americans got the flu during the 2019-2020 flu season, i.e., November 2019 through May 2020. Just 2,000 Americans got the flu during 2020-2021 flu season. (source: The Atlantic, BTN Research).
TWO-THIRDS – As of Friday 10/22/2021, 219 million Americas out of our 333 million population (66%) have received at least one dose of a COVID-19 vaccine approved by the FDA. (source: USAFacts.org, BTN Research).
HERE AT HOME – The US population grew by +7.4% during the decade of the 2010s (2010-2019), our nation’s lowest percentage growth rate in any decade since the 1930s.
(source: Census Bureau, 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.
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