Earnings Reports Continue to Come in Strong as S&P 500 and NASDAQ Reach New All-Time Highs

Market Recap week ending 10/29/21

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Wall Street faced a deluge of corporate earnings in the final week of October. Generally, reports were better than expected but tempered by management concerns related to the current state of the global supply chain. Tech earnings were mixed with positive market action from Microsoft and Google; Apple and Amazon shares fell in the wake of their announcements. That said, the Mega cap growth issues led the market higher with new all-time highs forged by the NASDAQ and S&P 500. In other corporate news, Tesla topped one trillion in market cap on news that rental car company Hertz has ordered 100,000 cars from the company. Pfizer and BioNTech were granted emergency use authorization of their Covid-19 vaccine for children ages 5 through 11. Facebook announced the company would change its name to Meta effective December 1st. In Washington, President Biden announced the framework for a 1.75 trillion dollar reconciliation bill, but it appears progressives are still not entirely on board. Economic data for the week continued to be mixed.

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For the week, the S&P 500 gained 1.3%, the Dow rose 0.4%, the NASDAQ led with an advance of 2.7%, and the Russell 2000 inched higher by 0.3%. The US Treasury yield curve continued to flatten as investors expect the Federal Reserve to increase rates sooner than expected. The 2-year note yield rose two basis points to 0.49%, while the 10-year yield fell ten basis points to 1.56%. Oil prices were little changed on the week, with WTI closing down $0.25 to 83.52 a barrel. Gold prices fell by $12.9, closing at $1783.90 an Oz.

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There was plenty of economic data to digest over the week. Q3 GDP estimates fell short of the mark, coming in at 2% versus expectations of 2.4%. Consumer Confidence came in better than expected at 113.8 versus the consensus estimate of 108. In contrast, the final October reading of the University of Michigan’s Consumer Sentiment Index came in below the prior reading. The two data sets showed people encouraged by the pullback in Covid 19 infections, higher wages, and increases in employment opportunities while being worried about inflation. Initial Claims hit another post-pandemic low at 281k as continuing claims trended lower to 2.243 million. Investors will hear from the Federal Reserve in the coming week and await a significant Employment Situation Report scheduled for release on Friday.

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Darren Leavitt, CFA

Chief Investment Strategist

With over 20 years of experience in the market, Darren bring a diverse background with multiple areas of expertise. Throughout his career, Darren had held a variety of senior positions including Chief Investment Officer, Chief Financial Officer, Portfolio Manager, Senior Analyst, Senior Trader, and Financial Advisor.

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