Markets “In a Nutshell” for October 19, 2021
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 1.60%, the S&P 500 was up 1.80%, and the NASDAQ rose 2.20%. Foreign stocks (MSCI EAFE) were also up, rising 2.40%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 1.57%. (Data source: Wall Street Journal)
Market Resilience
Equities were able to rebound last week and are once again moving closer to all-time highs as the market is 2% from record highs. The market was driven by strong earnings from the banks last week as earnings season begins to kick off. The market will pay close attention to earnings calls this week as expectations are high for many companies. If companies continue to report strong quarters, the market will most likely continue to move higher but we could see some increased volatility if companies fail to meet or beat their estimates. Although the market will react to earnings in the next couple of weeks there are still many questions around taxes, labor costs, inflation, and supply chain constraints that could cause the market to become more volatile if these issues are not resolved in the near future.
Economy
Jobless claims last week fell below 300,000 for the first time since March of 2020. This number continues to prove the economy is rebounding and people are starting to find jobs as we move toward the end of the year. Unemployment currently sits at 4.8% and wage growth is at the highest it has been in the past decade. Unemployment should continue to decline are there are currently more job openings than people unemployed within the United States. Although the current supply chain struggles may cause an economic slowdown in the short term, economic growth is set to continue in the long term as we move further from the Pandemic.
Quiz:
Quiz
How much will Social Security benefits rise by in 2022? (Scroll Down for Answer)
Answer below.
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Answer:
3) 5.9%, The Social Security Administration announced the increase last week which is the largest increase in roughly 40 years due to recent inflation