Stocks were mixed last week in choppy trading as investors battled the crosscurrents of good economic data and a troubling rise in COVID-19 infections globally.
The Standard & Poor’s 500 added 0.32%, while the Dow Jones Industrial Average slid 1.38% and the Nasdaq Composite index gained 1.24% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.59%.1,2,3
Each week I focus on a different set of numbers. This week I am looking at US vs. non-US stock performance. As you can see, there is no time period going back 5 years when the US market has not been the most profitable to own. Remember - the stock market is not the economy. Regular readers of my commentary will remember I often note that (for better or for worse) our system funnels the profits of society to large corporations more so than to labor (Europe) or the State (China). Just because China is growing fast and will soon be a superpower in most dimensions does not make it a good place to invest. Just look at the Emerging Markets performance (80% of that index is Chinese enterprises)
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A healthy retail sales report, falling jobless claims, positive earnings surprises, and strong manufacturing data lent support to stock prices, but investor sentiment was dampened by several concerns.
Chief among these worries are a resurgence of COVID-19 infections this winter and the impact inflation is having on consumer confidence and corporate profit margins. The uncertainty surrounding the re-nomination of Fed Chair Powell exacerbated this unease, but the decision from President Biden to keep him on for 4 more years was generally welcomed after these numbers were generated. Technology and other high-growth companies led the market, while some of the reopening stocks, such as travel and energy, lagged.
Retail Sales Jump
October retail sales increased 1.7%, indicating that consumers may be more confident than recent surveys have suggested. Sales of electronics, appliances, and autos were particularly strong last month.4
The market cheered the report, interpreting the results as a sign that inflation has not discouraged Americans from buying the products and services they want or need. This retail sales number, however, may be overstated for two reasons. First, higher prices increase the level of sales even if consumer demand is flat. Second, spending may have been pulled forward by consumer worries over higher future prices and concerns that goods may not be available during the holiday shopping season.
We want to wish you and your family a wonderful Thanksgiving, full of family, fun, and joy.
On this special day of gratitude, we would also like to express our appreciation to you for extending us the privilege of serving you this year and helping you pursue your important financial goals.
This Week: Key Economic Data
Monday: Existing Home Sales.
Tuesday: Composite PMI (Purchasing Managers’ Index) Flash.
Wednesday: Jobless Claims. Durable Goods Orders. Gross Domestic Product (GDP). New Home Sales. Consumer Sentiment. Federal Open Market Committee (FOMC) Minutes.
Source: Econoday, November 19, 2021
This Week: Companies Reporting Earnings
Monday: Zoom Video Communications, Inc. (ZM).
Tuesday: Best Buy Co., Inc. (BBY), Dollar Tree, Inc. (DLTR), Dell Technologies, Inc. (DELL), Autodesk, Inc. (ADSK), Analog Devices, Inc. (ADI).
Wednesday: Deere & Company (DE).
Source: Zacks, November 19, 2021
“The emblem of a philosophy is not that it contains a set of specific thoughts, but that it generates a way of thinking.”
– Samuel R. Delany
Selling Your Car or Buying From a Private Seller? Here Are the Tax Tips You Should Know
The first is that if you’re selling your car for less than what you paid for it, you likely won’t need to pay any sales tax on the sale because the IRS considers selling a used car for less than what you paid a capital loss. However, if you’re selling your car for more than what you paid (like if it’s a classic car you’ve restored and it’s increased in value), you may need to pay sales tax.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from CarGurus5
Stretches to Complement Your Workout
Here are some great stretches that will open up your hips, stretch out your hamstrings, and give your quads some love after a long run or lifting session:
Tip adapted from Runner’s World6
The Cage family has a mother, father, and six sons, and each son has one sister. So, how many people are in this family?
Last week’s riddle: An interesting occurrence happened about 25 minutes before 1 p.m. on May 6, 1978, involving numbers on the clock and months and years on the calendar. What was this numerically interesting moment? Answer: Early that afternoon, the time and date read 12:34 on 5/6/78.
Puppy (Canis lupus familiaris) and kitten (Felis catus) asleep on a very comfortable-looking blanket.
Footnotes and Sources
2. The Wall Street Journal, November 19, 2021
3. The Wall Street Journal, November 19, 2021
4. CNBC, November 16, 2021
5. cargurus.com, June 24, 2021
6. Runner’s World, June 24, 2021
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Weekly Market Insights: Stocks Mixed
November 22, 2021