Receive Weekly Market Updates via Email

shadow

Weekly Market Update for October 29, 2021

by Jim Ulland

Among the more entertaining news this week was the fact you will be able to rent a Tesla from Hertz, which ordered 100,000 of them.  And, you won’ t have Facebook to kick around anymore – they changed the name to Meta.  Covid kept in the news with the FDA approving vaccines for kids.  MN is offering teens a $200 payment to get vaccinated…expensive, but more acceptable than firing their parents for not getting vaccinated (seems like we could be more creative than that).

Other than those three headline items, the market focused on earnings and the tax and safety-net spending legislation in Congress.  Earnings news continued to be good.  The average earnings report was 12% ahead of expectations.  CEOs cited robust demand that partially offset the drag of supply chain disruptions and input cost escalation.  Apple attributed a $6 billion hit to sales to these issues.  Amazon noted labor shortages, higher wages, and additional transportation costs as the reasons its profits were depressed.  Both Apple and Amazon’s stocks were down about 2% Friday.

Congress showed this week why observers say it is dysfunctional.  One issue is the process being used.  Complex tax legislation is being proposed without committee hearings or input from issue experts and the public. No wonder it is hard to get agreement.  The ideas are not well thought out.  A second observation is that with inflation already hot, more spending is mistimed at best.  Inflation financially cripples those who are retired and on fixed income.  Inflation also is a financial disaster for those in low paying service jobs.  Congress seems oblivious.

Despite Congress, consumer optimism went up and unemployment went down.   The economy slowed in Q3, but the recovery is likely to reaccelerate.  Automakers say the chip shortage is abating and are raising production accordingly.  New home sales in September beat expectations.  Interest rates trended down.  Visa and Mastercard usage had strong improvement from a year ago.

The stock market took it all in stride and both the SP 500 and the NASDAQ set records on Friday.  For the week, the SP 500 was up +1.33% and the NASDAQ +2.7%. Monday the SP 500 was +0.47%, Tuesday +0.18%, Wednesday -0.51%, Thursday +0.98%, and Friday +0.19%.

Next week earnings will provide the news.  The Fed will meet and probably say they will decrease the amount of bonds they been buying.  This is expected but may bother the market for a day. Congress will find its way into the news, but local elections could bring bigger headlines.  The “Defund the Police” issue is on the Minneapolis ballot and the governorship race in Virginia is thought to be close and perhaps an indicator of what to expect in 2022 midterm elections.  ‘Never a dull moment. It could be spookier than Sunday night!

The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes to assist in explaining factors that may have had an impact in the past or may have an impact in the future on client portfolios or composites. All expressions of opinion reflect the judgment of the firm on this date and are subject to change. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Investors should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All investors are strongly urged to consult with their tax advisors regarding any potential investment.

Performance quoted is past performance. Past performance is not indicative of future performance. There is always a possibility of loss. Current performance may be lower or higher than performance shown. Differences in performance versus the indices/funds may be attributable, in part, to differences in the asset make-up of the strategy vs. the indices/funds. Performance calculations are based on the reinvestment of dividends and gains unless these amounts were paid out to the client. Performance is subject to revision. See www.ullandinvestment.com for important strategy disclosures.

This does not constitute a recommendation of any investment strategy or product for a particular investor. Investing involves risk; principal loss is possible. Investors should consider the investment objectives, risk, charges, and expenses of the strategy carefully before investing. This and other important information can be obtained by contacting Ulland Investment Advisors.

shadow
 

Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464