Record Highs – Monday Morning Market Memo – November 8, 2021

Record Highs – Monday Morning Market Memo – November 8, 2021

The major stock market averages all posted solid gains last week and finished at new record highs.  The Dow Jones Industrial Average rose 1.4% to 36,328 – the NASDAQ Composite jumped 3% to 15,972 – and the Standard & Poor’s 500 Index added 2% to 4,698.  This marks the fifth consecutive week of gains for the indices.

Factors contributing to the weekly gains and fresh record highs include:

  • Strong October Jobs Report – the United States Department of Labor reported the economy added 531,000 jobs last month – blowing past market expectations of 450,000.  Additionally, job gains for the prior two months were revised higher, and the unemployment rate improved to 4.6% from 4.8%
  • Positive COVID antiviral study – Pfizer announced its antiviral drug (along with another antiviral) cut the rates of hospitalizations and deaths by 89% in high-risk patients.  This buoyed market sentiment and was a boost to the reopening play.  Pfizer shares jumped nearly 11% on the news.
  • Earnings Season – Corporate earnings continue to be a tailwind for the stock market.  According to data from FactSet: For the third quarter of 2021, with 89% of S&P 500 companies reporting actual results, 81% have reported a positive EPS (Earnings Per Share) surprise and 75% have reported a positive revenue surprise (both of which are above the 5-year average).
  • Monetary Policy – the Federal Reserve announced tapering (reducing asset purchases) last week.  While a reduction in monetary stimulus is not a positive for short term market momentum, investors were expecting the decision, and the Fed did not do or say anything last week to surprise the financial markets – so the market was content.

Looking to the week ahead we still have more earnings reports flowing in, along with some economic data.  Companies scheduled to report earnings this week include AMC EntertainmentPayPalCoinbase GlobalPalantir TechnologiesBeyond MeatWalt DisneyWendy’s, and Yeti.  We’ll also be keeping an eye on important inflation data – with the Producer Price Index and Consumer Price Index due out.

As always, call us with any questions you may have or if you would like to set up a meeting.

All the best – Southport Station Financial Management, LLC