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 22, 2021

Economic/Market happenings:

Stocks

  • Major equities indices rose across the globe with the S&P 500 advancing 1.66%, the Russell 2000 adding 1.14% and the NASDAQ rising 1.30%. Meanwhile the international developed markets (MSCI EAFE) rose 0.63% and the emerging markets (MSCI EM) gained 0.75%. Within the US, growth outperformed value and mid caps outperformed the other stocks by market capitalization. Real estate and health care were the best performing sectors while communication services and materials were the laggards. (1)

Fixed Income

  • Federal Reserve chair Jerome Powell said it is time to begin tapering the Fed’s monthly asset purchases and warned that inflation is likely to remain elevated into 2022. (2) The yield curve continued to flatten reflecting concerns about the rate of economic growth and persistence of inflation. The 2-year and 10-year treasury rates rose 7 basis points each, to 0.48% and 1.66%, respectively, while the 30-year rate edged up just 3 basis points to 2.08%. (3)

Commodities

  • The price of West Texas crude oil achieved its ninth consecutive week of gains, based on front-month contracts — the longest streak going back to 19834 after Wednesday’s report that U.S. crude inventories fell for the first time in four weeks, down by 400,000 barrels for the week mid-October. (5) That was less than consensus expectations for a 2 million barrel drop.

​Economic Data

  • China reported 4.9% year-over-year growth in the third quarter, a big slowdown from the 7.9% recorded in the second quarter as construction output slowed. (6)

  • US industrial production fell 1.3% last month, below consensus expectations, after moving down 0.1% in August; output was previously reported to have risen 0.4% in August. In September, production of motor vehicles and parts fell 7.2%, as shortages of semiconductors continued to hobble operations, while factory output elsewhere declined 0.3%. (7)

Proprietary portfolio happenings:

Company News (8)

  • Abbott Laboratories (ABT), a Core Select holding, reported sales and earnings that were ahead of consensus expectations driven by their at-home Covid-19 test kits and heart-related medical devices.Management also raised earnings guidance for the full year.9Shares rose 7.86% for the week.

  • Koninklijke Philips NV (PHG), a G40i holding, reported earnings that were well ahead of expectations despite a small revenue shortfall vs. consensus. (10) Shares rose 7.85% for the week.

  • Snap Inc. (SNAP), a G33 holding, shares declined following disappointing revenue and earnings together with lower growth guidance for the coming quarter.This provider of camera applications which allow people to communicate thru short videos saw a shortfall in revenues derived from advertising on its app as those customers face supply chain disruptions/product shortages. (11) Shares were down 28.70% for the week.

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Sources:

(1) JP Morgan Weekly Market Recap 10-25-21

(2) Reuters, “Federal Reserve Chair Says Time to Taper” 10-23-21

(3) US Treasury

(4) Marketwarch.com “U.S. oil benchmark hits 7-year high“ 10-25-21

(5) Energy Information Administration 10-20-21

(6) Reuters, “China’s economy stumbles” 10-18-21

(7) Federal Reserve 10-18-21

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

(9) Abbott Laboratories press release 10-20-21

(10) Koninklijke Philips press release 10-20-21

(11) Snap Inc. press release 10-21-21


Herstle Jones, LUTCF, CLTC President & Founder

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

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