Holbrook Insights

Weekly Market Update - November 22, 2021

Global markets were mixed amid a rise in COVID-19 cases in Europe and the U.S. The largest beneficiary of this development was the technology-oriented Nasdaq Composite, which was a 2020 darling because lockdowns and remote work affected the sector less than others. Small-caps fell, as smaller businesses and energy were hurt by news of new lockdowns in countries such as Austria. Lockdown-style trading returned at the sector level, with technology and consumer discretionary leading the way, paced by companies such as Apple, Tesla, Amazon, Nvidia, and Microsoft.

Weekly Market Update - November 15, 2021

Global markets (excluding emerging markets) were down slightly, in part due to inflationary pressure and the recent winning streak for markets. The S&P 500 came into the week boasting a five-week winning streak and finished last Monday up for the eighth consecutive trading day, marking the longest streak of all-time closing highs since 1997.

Weekly Market Update - November 8, 2021

Yields fell across the Treasury curve last week as the Federal Reserve (Fed) announced plans to begin tapering the pace of asset purchases this month. The central bank will cut back on Treasury buying by $10 billion per month.

Weekly Market Update - November 1, 2021

The Treasury curve flattened slightly last week as investors geared up for this week’s Federal Reserve (Fed) meeting. The 10-year Treasury yield fell 5 basis points (bps) week-over-week, opening Monday morning at 1.57 percent.

Weekly Market Update - October 25, 2021

Treasury yields moved higher across the curve last week as equity markets rallied, and Federal Reserve (Fed) Chairman Jerome Powell reiterated that the central bank still plans on tapering asset purchases sooner rather than later. The 10-year yield picked up 6 basis points (bps) week-over-week to open Monday morning at 1.66 percent.
 
Global equity markets were up again last week as earnings drove the moves in stocks. Financials continued to rally following last week’s bank earnings and were further supported by the Fed’s ongoing discussion regarding potential upside inflation risks. Despite this, the Fed has continued to attempt to separate the difference between starting to taper asset purchases, which are expected to begin at the next meeting, and potential future rate hikes. 

Weekly Market Update - October 18, 2021

The Treasury curve saw a modest flattening last week as investors searched for direction amid earnings releases and growing inflation fears.
 
Global equity markets rallied last week as earnings season got off to a strong start from bank earnings. Bank of America, Goldman Sachs, and Morgan Stanley posted strong numbers supported by strong trade desk activity, loan growth, and low loan loss rates. The week also saw mixed data from inflation reports, with consumer prices rising more than expected due to higher energy and rent expenses but producer prices showing signs of easing. This latter result, alongside stronger-than-expected consumer spending, led markets to move higher at the end of the week.

Weekly Market Update - October 11, 2021

The three major U.S. indices increased last week, driven by a temporary solution to the debt ceiling issue. The Dow Jones Industrial Average led the way and was supported by moves in energy, financial, and industrial sectors.
 
On Friday, the September employment report was released. The report showed that 194,000 jobs were added during the month, down from the upwardly revised 366,000 jobs that were added in August and well below economist estimates for 500,000 additional jobs. This marks two consecutive months with slowing job growth and represents the fewest jobs added in a month since last December. Part of the slowdown in September was due to a relative lack of local government education hiring, as the sector lost 144,000 jobs on a seasonally adjusted basis.

Weekly Market Update - October 4, 2021

The Treasury yield curve steepened last week as investors weighed the possibility of longer-term elevated inflation. The 10-year yield was unchanged week-over-week, opening on Monday morning at around 1.48 percent. The 30-year yield rose about 5 basis points (bps) to open at 2.05 percent, while the 20-year yield gained 4 bps to around 1.98 percent.
 
Global equities were lower on the week with domestic growth and international among the hardest hit. A slew of factors led stocks downward, but the largest appeared to be the increase in bond yields, which hurt growth sectors such as health care and technology. The top-performing sectors were energy, financials, and materials. These sectors benefited from rising rates and potential longer-lasting inflation.

Weekly Market Update - September 27, 2021

The Treasury yield curve climbed following last week’s Federal Reserve (Fed) meeting, during which the central bank indicated tapering asset purchases may be warranted before year-end. The 10-year yield was up 17 basis points (bps), opening at 1.48 percent on Monday morning. 
 
Domestic equities were slightly higher last week as the market shook off concerns surrounding the impact of Chinese real estate developer Evergrande and potential surprises from the Fed surrounding tapering. Equities began the week sharply lower as investors were concerned Evergrande’s default on its loans would yield a contagion effect across global financial markets for institutions with exposure to Chinese real estate.

Weekly Market Update - September 20, 2021

The Treasury yield curve flattened on a week-over-week basis as markets sought safety early Monday, following a sharp sell-off in Asia and in anticipation of this week’s Federal Reserve (Fed) meeting.
 
Domestic indices were mostly lower last week as markets remained unsettled amid a noisy backdrop. Investors are hoping for clarity on a tapering timeline out of this week’s Fed meeting. Many believe tapering will begin before year-end, but economic data has been volatile recently. August’s Consumer Price Index (CPI) and retail sales reports were surprisingly positive, but sentiment remains dampened by a weak labor market. On the fiscal side, House Democrats will push to suspend the debt ceiling this week as an October deadline looms large.