US Equity Markets moved higher last week despite data that continue to show a slowdown in US economic growth. The S&P 500 hit fresh record highs again last week, up 0.6%, to bring its gains for the year to 20.8%. The Nasdaq was up 1.6% for the week and is now up 19.2% for the year, while the Russell 2000 (small cap stocks) rose 0.7% for the week, bringing its gains for the year to 16.1%.
Global Equity Markets posted healthy gains last week, helped by news that Japan's current prime minister will not seek re-election, causing a sharp rally in Japanese equities. Developed Markets rose 1.7% for the week as Japan surged 5.4% to offset slight declines in Europe. For the year, Developed Markets are now up 12.2%. Emerging Markets continued to rebound from their recent weakness, up 3.4% for the week, to bring their returns for the year back into positive territory, up 1.9%.
US Economic Data, including those impacting the US Consumer, came in weaker than expected last week. Payroll gains for August totaled 235K, a huge disappointment and well below expectations of 750K. Consumer Confidence for August fell to its lowest level since February 2021 on concerns about the Delta variant and rising food and gas prices. Positively, measures of US manufacturing activity for August were largely in line with expectations showing continued healthy expansion despite ongoing challenges with supply chain constraints.
Of Interest to Us
Slowing economic activity combined with rising inflation is leading to increased calls of possible stagflation in the US. While Payrolls gains for August fell well short of expectations, average hourly earnings topped projections and have continued to rise each month, with hourly earnings gains now up 4.3% year-over-year. Consumer Prices are up 5.4% year-over-year. It is likely too early to be concerned about stagflation, especially given the strength of economic growth this year, but it is something to watch.
Market Data
for the week ending 9/3/2021
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