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Weekly Market Update for September 10, 2021

by Jim Ulland

Following the poor new jobs report on Friday 9/3, the market declined every day thereafter including this Friday. Ironically, the relatively low number of new jobs filled was contrasted with 10.9 million open positions, a record. It seems many are reluctant to go back to work. Perhaps this will correct now that the bonus unemployment checks have ended, the vaccination rate is higher, and schools have reopened for in-person teaching allowing many parents to go back to work.

One thing the Delta variant has done is to urge more to become vaccinated. The one-shot vaccination rate is up to 75% for adults. On Thursday, the President announced a new mandate for employers of over one hundred workers. They are to require employees to be vaccinated. Dr. Scott Gottlieb, the former FDA Commissioner and frequent commentator on CNBC, said that this requirement is likely to take so long to implement that the Delta wave will be over. He noted that OSHA, the agency charged with implementation, would have to develop rules. This process is lengthy, and even more so on an issue with high controversy. Dr. Gottlieb said that the current voluntary system is working and even a mandate is unlikely to bring the vaccination rate over 90%. Others suggest that there will be a constitutional challenge, further delaying the mandate. As an aside, our office is 100% voluntarily vaccinated.

The Delta variant drag on the economy was only one of this week’s negative factors. Inflation is still with us. The Producer Price Index came in “hot” at an annualized increase of 8.3%, the highest in the index’s history. China continued to penalize its large technology companies, many of which are traded on US exchanges. The fiscal stimulus is coming to an end. There might be one more burst of spending from the proposed $3.5T “infrastructure” bill, but passage is far from assured. Should it pass, it will fuel worries about inflation and an economic drag from the large number of tax increases.

All was not doom and gloom. Corporations continued to buy back their stock. Consumers are still sitting on high levels of savings. Interest rates remained historically low and stayed fairly flat for the week. GDP estimates were revised slightly lower, but only to 6%, still two to three times higher than normal. There seems to be plenty of recovery left.

We are keeping client portfolios fully invested for now. Our view is that the recovery has twelve months to go before headwinds increase. There is too much power in the recovery to move to cash or government bonds, neither of which pay anything. Naturally, as a boutique, we can change this view quickly as economic signals warrant.

Both the SP 500 and the Nasdaq lost ground this week. The NASDAQ was off -1.61% and the SP 500 by -1.69%. Tuesday the SP 500 was -0.34%, Wednesday -0.13%, Thursday -0.46%, and Friday -0.77%.

Next week the political fires may heat up. The Recall vote on CA Governor Newson will be held. He is leading in the polls. The CPI number will be released probably confirming more inflation concerns. Afghanistan is likely to stay in the news, but no hurricanes are scheduled. Looks like a beautiful weekend in MN, enjoy.

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 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.


Ulland Investment Advisors

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