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Market Commentary for the week ending September 11th, 2021
- Everything except bonds lost value as volatility moved higher.
- Wholesale inflation was high in August but may have peaked.
- Real estate stocks were among the worst performers but still sharply higher for the year.
This Week’s Performance Highlights
- Stocks were lower around the world with U.S. stocks suffering the biggest declines. At the close of the week U.S. large stocks were lower by -1.7% as measured by the S&P 500. Small U.S. stocks performed even worse down a relatively sharp -2.8%.
- As the accompany graph shows, volatility has spiked up once again in September, normal during periods of market declines, although remains well below levels reached throughout the year.
Source: www.YCharts.com CBOE S&P 500 Volatility Index (^VIX)
- International stocks were lower as well with developed markets down -1.1%. From region-to-region the results were mixed with Eurozone markets off an average of -1.6% while stocks in Japan gained +1.4%
- Emerging markets also fell down -1.2% hurt by losses in several countries including South Korea and Turkey off -4.7% and -4.6% respectively.
- The alternative asset classes performed no better than stocks this week with real estates stocks suffering a sharp loss of -4.0%. In spite of a report of persistent inflation, gold fell -2.3% and commodities lost a small -0.1%.
- Bond prices were unchanged on average for the week.
Producer Price Index: +0.7%
Wholesale inflation, measured by the Producer Price Index (PPI), rose +0.7% in August. When removing food and energy prices, what is called the core rate, prices climbed just +0.3%. Year-over-year price gains were the highest on record since November 2010 coming in at +8.3%. There are reasons to believe the momentum in rising prices has peaked and we’ll see numbers falling closer to long-term averages in coming months.
Initial Jobless Claims: 310,000
Weekly initial jobless claims fell to a pandemic low of 310,000 but remain above the pre-pandemic average of about 220,000. A reduction in unemployment benefits may be encouraging some people to find employment.
Upcoming Economic Reports
- Retail Sales
- Consumer Price Index
- Industrial Production
- Consumer Sentiment
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