Hello and welcome to this week’s Jones Financial Blog! Our goal at Jones & Associates is to help keep you up to date with interesting current economic/market happenings as well as some proprietary portfolio happenings. Knowledge is power and thought we would share some of ours with you. Enjoy!
All data is for the week ended August 6, 2021
Equities rose last week across all the major global indices. The S&P 500 increased 0.96%, the Russell 2000 added 0.98%, the NASDAQ gained 1.14%, the emerging markets (MSCI EM) rose 1.18% and the international developed markets (MSCI EAFE) were up 1.05%. Within the US, gains were fairly even across all styles. Financials were the best performing sector while staples was the only sector to register a decline. (1)
Interest rates rose and bond values declined last week, with the benchmark 10-year treasuries ending the week with a 1.31% yield, up 7 basis points for the week following a strong jobs report. (2) See Economic Data below.
The U.S. benchmark, WTI Crude, slumped to $68.28 per barrel, a 7.67% drop triggered by surging COVID delta variant cases worldwide affecting demand, including in the biggest economies, the United States and China. This is occurring while OPEC+ is increasing production. (3)
July employment data was ahead of expectations with the unemployment rate falling to 5.4% from 5.9% in June. The percentage of people either working or searching for jobs (the labor force participation rate) actually rose slightly after being suppressed since last summer. (4)
The manufacturing survey fell to 59.5 in July from 60.6 in the prior month. The new rate is a six-month low due to broad shortages. (5) Meanwhile the services index jumped 4.0 pts to 64.1 in July, much stronger than expected and erasing the 3.9 point drop in June. Prices paid climbed 2.8 points. (6)
Proprietary portfolio happenings:
Company News (7)
Sprout Social Inc. (SPT), a G33 holding, rose 18.18% following a particularly strong report of quarterly revenue and earnings including 55% year over year growth in large customers for this cloud-based social media software firm. (8)
Square Inc. (SQ), a G33 holding, reported revenues and earnings that exceeded expectations, raised guidance, and announced the acquisition of a majority interest in Afterpay, an Australian software service to add “buy now, pay later” capability to Square’s payments options.Shares rose 11.26% for the week. (9)
Several G50 financial holdings—Synovus Financial (SNV), Fidelity National Financial (FNF), Bank of America Corp. (BAC), Citizens Financial Group (CFG), Truist Financial Corp. (TFC) and JP Morgan (JPM)—rose 4.00-6.04% last week following strong quarterly results that included strengthening credit metrics. The potential for higher interest rates and a boost to earnings growth sent shares higher. (10) Additionally, Fidelity National Financial raised its quarterly dividend by 11%; shares now yield 3.42%. (11)
Did You Know? There is a long held belief that the United Kingdom and the Tower of London will fall if the six resident ravens ever leave the fortress. There are seven ravens at the Tower— the required six plus a spare. While wild ravens live for 10-15 years, Tower ravens can live past 40 years.
(2) US Treasury
(7) All weekly changes in company stock prices: Yahoo Finance