Overcoming jitters about the Delta variant and the reintroduction of mask requirements, stocks climbed higher on strong employment data and a fresh batch of strong corporate earnings.
The Dow Jones Industrial Average rose 0.78% while the Standard & Poor’s 500 advanced 0.94%. The Nasdaq Composite index gained 1.11% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, picked up 1.61%.1,2,3
Push and Pull
The crosscurrents of strong corporate profits and the rise in Delta variant infections led to a roller coaster week of price action, as markets alternated between daily gains and losses. By Thursday, however, investors appeared to grow more optimistic that the economic reopening was not under serious threat when back-to-back employment reports suggested that the economic recovery remained on track.
A favorable initial jobless claims report was enough to send the S&P 500 and Nasdaq to new all-time highs. Thanks to Friday’s stronger-than-expected employment report, the S&P 500 managed to add to its previous record close, while the Dow Jones Industrial Average set its own record high. The more tech-centric Nasdaq, however, slipped off its highs.4
Last week reinforced the idea of an improving labor market. After a disappointing ADP (Automated Data Processing) National Employment Report that showed a slowdown in private-sector hiring, with just 330,000 new jobs added, subsequent employment data was much more encouraging.5
Thursday’s report of a modest drop in initial jobless claims to 385,000 and a more substantial drop of 366,000 in continuing claims was followed by a solid employment report on Friday, which showed employers had added 943,000 new jobs in July—the biggest jump since August 2020. This hiring increase shaved the unemployment rate to 5.4%, down from June’s 5.9% rate.6,7
This Week: Key Economic Data
Monday: JOLTS (Job Openings and Labor Turnover Survey).
Wednesday: Consumer Price Index.
Thursday: Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, August 6, 2021
This Week: Companies Reporting Earnings
Monday: Air Products and Chemicals, Inc. (APD), Tyson Foods, Inc. (TSN).
Tuesday: Sysco Corporation (SYY), Coinbase Global, Inc. (COIN).
Wednesday: Nio, Inc. (NIO), eBay, Inc. (EBAY).
Thursday: The Walt Disney Company (DIS), Baidu, Inc. (BIDU), Doordash, Inc. (DASH), Airbnb, Inc. (ABNB).
Source: Zacks, August 6, 2021
Give Back to Your Community By Working as a Tax Volunteer
If you're looking for a way to give back to your community and want to help people with low-to-moderate incomes, consider applying to volunteer with the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs. These programs offer free tax help to senior citizens, persons with disabilities, and those who speak limited English to understand their tax situations.
Here are some of the perks of being a VITA or TCE volunteer:
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov8
Footnotes and Sources
2. The Wall Street Journal, August 6, 2021
3. The Wall Street Journal, August 6, 2021
4. CNBC, August 6, 2021
5. CNBC, August 4, 2021
6. The Wall Street Journal, August 5, 2021
7. The Wall Street Journal, August 6, 2021
8. IRS.gov, September 19, 2020
9. Heart.org, 2021
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
Copyright 2021 FMG Suite.
Weekly Market Insights: Jobs Strong, Earnings Strong
August 10, 2021