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 26, 2021
Equities fell across the globe following reports of a spreading new Covid variant called “Omicron” from South Africa, triggering the worst day of the year for stocks on Friday. For the full week the S&P 500 dropped 2.18%, the NASDAQ declined 3.52% and the Russell 2000 was down 4.13%. Overseas, the emerging markets (MSCI EM) fell 3.71% as the developed markets (MSCI EAFE) dropped 3.61%. Value outperformed growth stocks in the US as energy and staples were the leaders, consumer discretionary and communication services were the laggards. (1)
Bond prices rose and interest rates fell, with the benchmark 10-year treasury ending the week at 1.48%, down 6 basis points. (2) The new Covid variant has some investors expecting the Federal Reserve to hold off on raising interest rates. (3)
The price of West Texas crude oil dropped 10.26% for the week to $68.15 per barrel following news of the Covid variant on Friday. (4) Prices had been holding up following a decision by the U.S. administration to release up to 50 million barrels of strategic reserves in a bid to push down gas prices. The release was determined to be insufficient to offset rising demand up until Thursday. All eyes are now on the December 2nd meeting of OPEC which is forecasting a glut of oil in the first half of next year. (5)
Business investment (as measured by new orders for nondefense capital goods excluding aircraft), rose 0.6% in October compared with the previous month. This has been part of a solid trend in rising business investment this year and indicates that productivity is on the upswing during this extended period of labor shortages. (6)
Proprietary portfolio happenings:
Company News (7)
MercadoLibre, Inc. (MELI), a G33 holding, issued 1 million new shares, generating $1.55 billion. Proceeds are earmarked for general corporate purposes. That, in addition to a general selloff in growth stocks, caused the shares to drop 10.17% for the week. (8)
Sprout Social, Inc. (SPT), a G33 holding, dropped 13.89% last week on weakness for growth stocks, particularly small caps and software.
Travel + Leisure Inc. (TNL), a G50, Core Select and Contrarian Choice holding, declined 8.96% because many nations, including the US, are imposing some level of travel restrictions from areas with present cases of Omicron, causing investors concern about increasing levels of restrictions.
Did You Know? There are parts of Africa in all four hemispheres. For people whose education was largely focused on the Western world, it may be surprising to find out exactly how huge the continent of Africa is. For instance, it spans all four hemispheres and covers nearly 12 million square miles
(2) US Treasury
(7) All weekly changes in company stock prices: Yahoo Finance