U.S. stocks finished mixed on Friday, 19th November 2021, as energy shares dragged down the S&P 500 index slightly lower. Meanwhile, the strength in tech shares lifted the Nasdaq Composite to a record high.
Hawkish remarks from the Fed officials, Fed Vice Chairman Richard Clarida, and Fed Governor Christopher Waller suggested that the Fed may need to quicken the pace of tapering.
Investors are concerned with the COVID-19 related developments in Europe. Austria became the first western European country to impose widespread restrictions. Parts of Germany also closed non-essential businesses, while the Netherlands has already ordered shops and bars to close early.
The news cut down shares of air carriers and other travel-related firms. Also, the House passed the Biden Administration’s $2 billion economic plan, where it moves to the Senate for possible revisions.
For the week, the Dow Jones average fell by 1.3%, the S&P edged by 0.3% higher, while the Nasdaq rose by 1.2%.
Here are the closing levels on Friday: –
Bloomberg chatted with the executives at the New Economy Forum in Singapore this week, including Goldman Sachs CEO David Solomon, who warned that greed is outpacing fear.
Solomon said that markets could face a rocky time ahead as the global economy seeks to emerge from the abrupt impact of the pandemic.
“When I step back and think about my 40-year career, there have been periods of time when greed has far outpaced fear — we are in one of those periods,”
“Something will rebalance it and bring a little bit more perspective.”
However, what is that “something”?
For now, the markets have mainly ignored the rise in inflation. The Virus seems like a non-threatening issue lately, even with rising numbers.
The 10Y Yields at these levels won’t stop the Tech shares from rising. And as we have seen, the market is happy to be long in general.
VIX at 17.91 indicates that there may be some volatility as we go forward, so the market shall best be prepared.
This week will be a shortened one as the U.S. markets will be closed for Thanksgiving on Thursday and closing early on Friday.
The University of Michigan will release its final reading of its Consumer Sentiment Index (MCSI) for November on Wednesday.
Additionally, the U.S. Census Bureau will release its report on durable goods orders for the month of October on Wednesday.
We’ll also get an update on the personal spending and income in the U.S. for the month of October, as well as the Personal Consumption Expenditures Price Index.
Source: CBOE, Reuters, Bloomberg
This commentary is written by James Gomes
James has been in the finance industry for over 30 years and most recently worked for a large U.S. bank for more than 20 years.
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