S&P 500, Nasdaq, as well as Dow finished October at record highs, notching gains for the month despite soft Amazon, and Apple results.
In fact, S&P 500 and Nasdaq booked the biggest monthly gains since November 2020.
The S&P 500 gained 0.2%, after opening lower. The gains brought the benchmark index up 6.9% for October, its biggest monthly increase since last November. Meanwhile, the Nasdaq 100 pushed 0.5% higher, offset by gains in Tesla Inc., as well as Meta Platforms Inc., after its name change from Facebook Inc.
The yield on the U.S. 10-year Treasury fell to 1.55% after earlier gains.
The latest GDP data in the U.S. showed that growth slowed more than expected in the third quarter, hampered by supply chains and a surge in Covid-19 cases. A separate report showed that weekly jobless claims fell to a pandemic low, and personal spending slowed in line with analysts’ estimates in September.
Here are the closing levels on Friday: –
The Federal Reserve’s 2-day meeting on Tuesday and Wednesday, 2 November 2021 and 3 November 2021 respective, as well as the employment report, are the big events for the week.
The central bank is widely expected to announce that it will begin to unwind its $120 billion in monthly bond purchases, and end the program entirely by the middle of next year.
In a report to clients late Friday, entitled Goldman Now Sees Fed Hiking Rates in July as Inflation Lingers, economists led by Jan Hatzius said the Fed will raise its benchmark from a range of zero to 0.25% soon after it stops tapering its massive asset-purchase program. A second increase will follow in November 2022, and the central bank will then raise rates 2 times a year after that.
Over the weekend, Bloomberg reported China’s factory activity contracted for a second straight month in October, as electricity shortages and soaring commodity prices continued to weigh on manufacturers.
As was mentioned last week, the bulls have control and while the above are causes for concern, the price action suggests we are heading for a higher close for the year.
Is the market getting complacent and ignoring any bad or negative news? Will the bears come out of hiding? Is it time to book some profits for the bulls?
It is best we prepare for some volatility along the way.
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 US bank for more than 20 years.
While every effort has been made to ensure the accuracy of the information in this document, the DOO Group does not warrant or guarantee the accuracy, completeness or reliability of this information. The DOO Group does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. A decision to invest in financial instruments, any investment related products or any other products, securities or investments should not be made in reliance on any of the statements in this document. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.
Without limiting any of the foregoing, in no event will the DOO Group or any of its affiliates be liable for any decision made or action taken in reliance on the information in this document and, in any event the DOO Group and its affiliates shall not be liable for any consequential, special, punitive, incidental, indirect or similar damages arising from, related to or connected with this document, even if notified of the possibility of such damages.
This document contains forward-looking statements. The forward-looking statements included in this document are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on the analysis of DOO Group of the statistics available to it. Assumptions relating to the forward-looking statement involve judgments with respect to, among other things, future economic, competitive and market conditions all of which are difficult or impossible to predict accurately. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the DOO Group that the forward-looking statements will be achieved. The DOO Group cautions you not to place undue reliance on its forward-looking statements and we assume no responsibility for updating any forward-looking statements. Expressions of opinion are those of the authors and are subject to change without notice.
This document is strictly confidential to the recipient. It is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly to other person or published, in whole or in part. For any purpose, neither this document nor any copy of it may be taken or transmitted into Singapore, Hong Kong, Malaysia, United Kingdom and the United States or distributed directly or indirectly in Singapore, Hong Kong, Malaysia, United Kingdom and the United States. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document should inform themselves about, and observe any such restrictions. By accepting this report, you agree to be bound by the foregoing instructions.