Market/Portfolio Happenings



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 27, 2021

Economic/Market happenings:

Stocks

  • Equities surged last week on reports of strong economic growth, a Covid vaccine approval by the FDA, continued demand for manufactured goods and the Federal Reserve’s decision to continue to support bond markets into fall. The benchmark S&P 500 gained 1.54%, the Russell 2000 was boosted by 5.06% and the NASDAQ added 2.82%. Overseas markets were also strong with the international developed markets (MSCI: EAFE) rising 1.86% and emerging markets index (MSCI: EM) gaining 4.29%. Within the US, small caps outperformed large caps and growth outperformed value. Energy and financials were the best performing sectors while utilities and consumer staples were the laggards. (1)

Fixed Income

  • The Federal Reserve ended its annual “Jackson Hole” symposium (virtually this year) with a notice that the Fed will continue to buy bonds until later this year and that interest rates are unlikely to be raised for some time yet. Interest rates declined from their mid-week highs but closed the week slightly higher than the prior Friday. The benchmark 10-year treasury yield was 1.31% on Friday, up 5 basis points for the full week. (2)

Commodities

  • Natural gas reached a three-year high on Friday, reaching $4.38 per btu (up 86% year to date1) after rising last week on expectations that production would be cut by Hurricane Ida along with a report that gas inventories grew less than expectations. In general, production of natural gas has declined with the decline in US oil production since gas is a byproduct of that process. Additionally, more gas is being shipped overseas as liquified natural gas or LNG. (3)

​Economic Data

  • The US economy grew 6.6% during the second quarter ended June, in line with expectations and slightly higher than the prior estimate of 6.5%. The faster pace reflected somewhat stronger consumer spending and exports than originally reported. This was viewed positively since it included the initial impact of the Covid delta variant. (4)

  • Eurozone business activity expanded at nearly its fastest pace for 15 years in August. Rising vaccination rates boosted business optimism about the future, which was near its highest level since the survey began in 2012 with impressive momentum. The survey also recorded strong hiring activity, at a 21-year high. (5)

Proprietary portfolio happenings:

Company News (6)

  • Palo Alto Networks Inc. (PANW), a Core Select and G33 holding, rose 25.5% last week following quarterly results and management guidance for the upcoming fiscal year that were well ahead of expectations for this security software company. (7)

  • Travel and entertainment related stocks, including Las Vegas Sands (LVS)—a Contrarian Choice holding – and Darden Restaurants (DRI), Travel + Leisure (TNL), Southwest Airlines (LUV)— Contrarian Choice, Core Select and G50 holdings– rose 7-17% last week. The gains occurred after a vaccine against Covid-19 received full approval by the US Food & Drug Administration. (8)

Did You Know? The prevailing theory behind why humans enjoy music is that we learn patterns and regularities within music, and we unconsciously predict what will come next. When we are right, our brain gives us a dopamine rush. Thus, the constant dance between expectation and outcome is pleasurable to us.




Sources:

(1) JP Morgan Weekly Market Recap 8-30-21

(2) Federal Reserve Bank Jackson Hole Remarks by Chairman Powell 8-27-21

(3) Barron’s, “Natural Gas Soars” 8-29-21

(4) US Bureau of Economic Analysis 8-26-21

(5) IHS Markit Eurozone Manufacturing PMI 8-23-21

(6) All weekly changes in company stock prices: Yahoo Finance

(7) Palo Alto Networks press release 8-23-21

(8) US Food & Drug Administration press release 8-23-21



Herstle Jones, LUTCF, CLTC President & Founder

With over 20 years of experience in the financial services industry,

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