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 November 5, 2021
Equities advanced in most of the major stock indices last week, with especially strong gains in the US small caps. The benchmark S&P 500 rose 2.03%, the NASDAQ added 3.08% and the Russell 2000 gained 6.11%. The gains primarily reflected Friday’s news of faster hiring in the US and the discovery of an anti-Covid pill. Overseas, the developed markets index (MSCI EAFE) rose 1.64% while the emerging markets index (MSCI EEM) eased 0.03%. In the US consumer discretionary and technology were the best performing sectors while health care and financials were the laggards. (1)
The Federal Reserve announced it will begin to taper its purchases of bonds which had been a means to stimulate the economy during the Covid pandemic. The Fed’s chair also stated that they had not set an agenda for raising interest rates (2), confirming both a steady labor market recovery and persistent inflation pressures. (1) Treasury yields fell and bond values rose for the 10-year maturities, ending the week with a 1.45% yield, down 10 basis points. (3)
Oil prices fell to a near four-week low on Wednesday, after U.S. crude inventory rose 3.3 million barrels which was more than expected. (4) West Texas crude ended the week at $81.27 per barrel, down 2.75%. (5)
Companies increased hiring in October, adding 531,000 new jobs, leading the unemployment rate to dip to 4.6% from 4.8% the prior month and hitting a new pandemic low. However, the official rate continues to underestimate the true level of unemployment since the number of people who joined the labor force only rose by 104,000. That left the rate of job participation at just 61.6% of potential workers. (6)
Proprietary portfolio happenings:
Company News (7)
Stocks in companies that are highly linked with the health of the population rose strongly last week after Pfizer Inc. (PFE) announced extremely strong results from a late stage clinical trial of its Paxlovid Covid anti-viral pill, revealing an 89% reduction in risk for hospitalization or death. (8) Travel stocks advanced sharply, with Southwest Airlines (LUV)—a Core Select and Contrarian Choice holding— and Travel + Leisure (TNL)—a G50, Core Select and Contrarian Choice holding —advancing 10.47% and 9.35%, respectively. Also Las Vegas Sands (LVS), a Contrarian Choice holding, advanced 9.87%.
Pacira BioSciences Inc. (PCRX), a G33 holding, reported quarterly earnings that were stifled by the impact of Covid on hospital procedures. However, management noted an uptrend in sales and expects a rebound in elective procedures that is likely to drive strong product growth for the remainder of the year. It’s latest acquisition is also expected to be accretive to earnings in the coming year. (9) Shares advanced 11.11% for the week.
Did You Know? Sergeant Stubby was a stray dog found during military training in 1917. He served with the 102nd Infantry Regiment during World War One. He saved his regiment from surprise mustard gas attacks repeatedly due to his ability to smell mustard gas at a distance. He also found and comforted the wounded and caught a German spy by the seat of his pants, holding him there until American soldiers found him. He is the only dog to have been promoted to sergeant through combat during that war. Also, Veterans Day is November 11.
(3) US Treasury
(7) All weekly changes in company stock prices: Yahoo Finance