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Week In Perspective: Sellers Take Over in Shortened Week [10-Sept-21]

The stock market had a tough four-day week, with the S&P 500 losing 1.7% and closing lower in each session as buyers appeared exhausted. The Dow Jones Industrial Average (-2.2%) and the Russell 2000 (-2.8%) both declined more than 2.0% while the Nasdaq Composite declined 1.6%.

All 11 S&P 500 sectors finished the week in negative territory, led lower by the real estate (-3.9%), health care (-2.7%), and industrials (-2.5%) sectors with losses over 2.0%. The top-weighted information technology sector declined 1.8%, while the consumer discretionary sector (-0.3%) outperformed on a relative basis.

No one event dragged the market lower. Instead, it was a confluence of negative-sounding news that pressured risk sentiment amid speculation for a larger pullback.

On the macro-related front:

  • Goldman Sachs reduced its Q4 and 2021 GDP forecasts.
  • The enhanced unemployment benefits expired.
  • Axios reported that Senator Manchin (D-WV) would only support $1.5 trillion for any human infrastructure plan.
  • The ECB said it could start reducing its emergency asset purchases by a moderate pace.
  • Treasury Secretary Yellen warned about the economic consequences if lawmakers don’t resolve the debt-ceiling issue.
  • Both the $24 bln 30-year bond and the $38 bln 10-yr note auctions saw decent demand, reflecting lingering growth concerns.
  • Cryptocurrencies sold off, reminding some investors about reducing their risk exposure.

On the corporate front:

  • A court ruled that Apple (AAPL) must give developers the ability to create their own payment options.
  • Johnson & Johnson (JNJ)Merck (MRK), and Amgen (AMGN) were downgraded to Equal-Weight from Overweight at Morgan Stanley.
  • The airlines lowered their Q3 outlooks, as did Sherwin-Williams (SHW) because of raw material issues.

The 10-yr yield increased two basis points to 1.34% amid some hot PPI data for August and continued improvement in the weekly initial and continuing claims report.

Week in perspective provided by

Mike Minter

Mike develops investment portfolio allocations, handles trading and rebalancing, and conducts research and analysis as a Portfolio Manager and Financial Advisor for the firm. As a perpetual student of investing and the markets, Mike considers himself obsessed with the subject. Mike has earned the CERTIFIED FINANCIAL PLANNER™ (CFP®) and Certified Fund Specialist® designations. He is also an active member of the Houston chapter of the Financial Planning Association (FPA).   Read Mike’s Profile HereRead More Articles by Mike

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