Shortened Week Ends Down as Crypto Sells Off and Outlook for U.S. Growth Potential is Dampened

Market Recap Week ending 9.10.21

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The holiday-shortened week produced negative returns across the board for US equity indices. The month of September has historically been a tough month for equities, and given the outsized moves we have seen so far this year, it is not a surprise to see a bit of a pullback. An early week sell-off in Cryptocurrencies set the stage for other risk assets. Bitcoin started the week at $52,791, then tumbled 13% to close on Friday at $45,605. Goldman Sachs was the third investment bank in a couple of weeks to reduce their growth outlook for the US, which further dampened market sentiment. In Europe, the European Central Bank announced that it would curtail its asset purchase program at a very measured pace and on a vague timeline. In Washington, the Infrastructure spending bill continued to be up for debate even as the Democrat Senator from West Virginia, Manchin, partially pulled his support for the proposed human infrastructure component of the bill. Economic data was light on the week but showed another strong print in the Producers Price Index and continued progress on the labor market.

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For the week, the S&P 500 lost 1.7%, the Dow gave up 2.2%, the NASDAQ shed 1.6%, and the Russell 2000 lagged with a loss of 2.8%. US Treasuries sold off slightly for the week. The 2-year yield increased one basis point to 0.21%, while the 10-year Note yield increased two basis points to close at 1.34%. Gold prices fell just over 2% or $41.70 to close at $1792 an Oz. Oil prices increased fractionally, gaining $0.60 to close at $69.75 a barrel.

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On a year-over-year basis, the Price index for final demand was up 8.3% as the headline PPI for August came in at 0.7%, a bit higher than the expected 0.6%. Initial Jobless Claims fell to the lowest level since the pandemic's start, coming in at 310K versus an expected 337k. Continuing claims fell to 2.783 million on a week where supplemental federal unemployment benefits expired. Next week we will get a look into consumer prices with the CPI. We will also get August Retail Sales and the first September reading of the University of Michigan's Consumer Sentiment survey.

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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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