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 October 8, 2021

Economic/Market happenings:

Stocks

  • Most of the major indices reported gains last week, with US stocks rising toward week’s end after it was indicated that Congress would vote to extend the debt ceiling for several weeks. The S&P 500 rose 0.83% for the week while the NASDAQ added 0.10% and the Russell 2000 declined 0.37%. Overseas, the developed markets (MSCI EAFE) rose 0.30% while the emerging markets (MSCI EEM) gained 0.86%. The US large caps outperformed small caps and value outperformed growth. By sector, energy and financials led while real estate and health care were the laggards. (1)

Fixed Income

  • Interest rates rose and bond values fell last week, with the benchmark 10-year treasuries rate rising 13 basis points to 1.61%. (2) Rates rose despite a major disappointment in September employment figures released on Friday (see Economic Data below), which calls into question when the Federal Reserve will taper its bond purchases and subsequently raise the Fed rate. Despite last week’s rise in interest rates, the 10-year’s real yield (the stated yield minus long-term inflation expectations) is still below 0%, indicating that investors are losing value after adjusting for the inflation rate.

Commodities

  • The price of West Texas crude oil briefly crossed $80 per barrel on Friday before closing at $79.35, a gain of 4.57% for the week. (3) Oil inventories increased by 2.3 million barrels (4)—which was better than consensus expectations— but expected demand for crude is rising as supplies of other energy sources are under pressure.

​Economic Data

  • New jobs grew just 194,000 in September, well below consensus expectations for nearly 500,000. The unemployment rate fell to 4.8% from 5.2% in August as labor force participation edged lower. Reduced government employment was the primary reason for the disappointing jobs growth while hotels and restaurants were the primary driver of growth. Wages increased sharply as the monthly gain of 0.6% pushed the year-over-year increase to 4.6% as companies are using wage increases to combat the persistent labor shortage. (5)

  • On a weekly basis, initial claims for state unemployment benefits decreased 38,000 to a seasonally adjusted 326,000, better than the 338,000 consensus estimate. Initial claims were an improvement after a few weeks of deterioration. (6)

  • Job cuts year to date were the lowest on record with last month’s number down 85% compared to a year earlier. The report also showed companies announced plans to hire 10 times more people in September versus August. (7)

Proprietary portfolio happenings:

Company News (8)

  • AstraZeneca (AZN), a G40i holding, announced a new drug to prevent Covid-19 symptoms, the first drug of its kind. Management has submitted at request to the US Food & Drug Administration for emergency use, targeting vulnerable people such as the immunocompromised. Shares rose 1.56% for the week. (9)

  • L3 Harris Technologies (LHX), a G50 holding, was awarded a $947 million, 10-year contract to modernize the U.S. Air Force B-52 electronic warfare self-defense, radio frequency systems to protect aircrew and aircraft from enemy radar threats and attacks. Shares rose 6.24% for the week. (10)

  • Roche Group (RHHBY), a G40i holding, received approval from the US Food & Drug Administration of a fast-track process for its treatment for people with early Alzheimer’s disease since the drug has been successful in trials thus far. Shares rose 6.95% for the week. (11)

Did You Know? There’s a planet that’s shaped like a potato? About the same size as Pluto, the dwarf planet Haumea orbits the sun beyond Neptune and has rings that are similar to Jupiter. But what makes this object even more interesting is that it’s shaped like a potato!




Sources:

(1) JP Morgan Weekly Market Recap 10-11-21

(2) US Treasury

(3) Oilprice.com

(4) Energy Information Administration 10-6-21

(5) CNBC, “September Jobs Creation Comes Up Short” 10-8-21

(6) Department of Labor 10-7-21

(7) Challenger, Gray & Christmas Job Cuts Report 10-7-21

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

(9) AstraZeneca press release 10-5-21

(10) L3 Harris Technologies press release 10-5-21

(11) Roche Group press release 10-8-21



Herstle Jones, LUTCF, CLTC President & Founder

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

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