Passage of Infrastructure Boosts Stocks
August 16, 2021
Looking past inflation figures and Delta variant trends, stocks last week found a way to climb higher and set fresh record highs in the process.
The Dow Jones Industrial Average rose 0.87%, while the Standard & Poor’s 500 advanced 0.71%. The Nasdaq Composite index was flat (-0.09%) for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.77%. 1
Stocks moved higher amid relatively light trading last week. After initially retreating under the weight of Delta variant updates, stocks grinded higher, catalyzed by the Senate’s passage of a $1 trillion infrastructure bill.
Two themes emerged last week. The first was that inflation assumed a less threatening profile. The most recent Consumer Price Index report showed some moderation in consumer price increases, while investors appeared to interpret a hotter-than-expected Producer Price Index report as the peak in this inflation cycle.
Also worth noting were comments by multiple Federal Reserve Bank regional presidents suggesting that the time for tapering (i.e., ending the Fed’s bond purchases) was nearing, with one intimating that tapering could start as early as October.2
Consumer prices climbed at their fastest rate since August 2008, rising 5.4% year-over-year. But this elevated rate was expected by most economists. The core inflation rate (excludes the more volatile food and energy prices) came in 4.3% higher, substantially lower than anticipated. This deceleration in core inflation was largely attributed to a slowdown in price increases in used cars and apparel. 3
More unsettling was the following day’s Producer Price Index (PPI). The PPI, which can be an indicator of future consumer prices, came in at the highest rate since tracking began, surging 7.8%. 4
This Week: Key Economic Data
Tuesday: Retail Sales. Industrial Production.
Wednesday: Housing Starts. FOMC (Federal Open Market Committee) Minutes.
Thursday: Jobless Claims. Index of Leading Economic Indicators.
Source: Econoday, August 13, 2021
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Walmart, Inc. (WMT), The Home Depot, Inc. (HD), Agilent Technologies, Inc. (A), Roblox Corporation (RBLX).
Wednesday: Nvidia Corporation (NVDA), Cisco Systems, Inc. (CSCO), Target Corporation (TGT), Lowe’s Companies, Inc. (LOW).
Thursday: Ross Stores, Inc. (ROST), The Estee Lauder Companies, Inc. (EL).
Friday: Deere & Company (DE).
Source: Zacks, August 13, 2021
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
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JETS ETF COULD BE READY FOR TAKEOFF WITH SOME CASH FINDING ITS WAY BACK INTO THE MARKET
“The markets are trading as expected; a bit overbought but nothing too concerning. Interest rates look to be rising and bond prices are falling, and the rise in bond yields should have a very positive effect on the financial and banking sectors.” 5
This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice.
Protect Your Tax Data
Protecting your data is very important in today's digital age. The IRS shared the "security six" guidelines that tax pros should follow to protect taxpayer data, but these principles are good for everyone to practice.
Anti-virus software: This software scans computer files for malicious software, or malware, on the device. Anti-virus vendors find new issues and update malware daily. Always install the latest updates of the software on your computer.
Two-factor authentication: Two-factor authentication adds an extra layer of protection beyond just a password. Not only do you enter your username and password, but you also enter a security code that can be sent to another device for extra protection.
Drive encryption: Drive encryption transforms sensitive data into unreadable code that cannot be deciphered easily by unauthorized people, so only the person who is authorized to access the data can do so. 6
* 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.
Tips for Eating Less Salt
Sodium isn't all bad for our bodies, but too much can increase blood pressure and cause stress on the heart and blood vessels. Because of this, it's important to monitor your sodium intake and be aware of how much sodium is in the foods you're eating.
If you want to tackle cutting back on sodium, choose unprocessed or minimally-processed foods. Prepared foods are generally high in added sodium when compared to fresh options. Cut back on sources of high sodium, such as pepperoni pizza, white bread, processed cheese, deli meat and hot dogs, and other red meat and processed foods. Instead, eat more fruits, veggies, and whole grains which are all lower in sodium. 7
Old Fashioned Potato Cakes
Time: 20 mins
- 2 cups mashed potatoes
- 1 cup all-purpose flour
- 1 onion, diced
- 1 egg
- ½ teaspoon ground black pepper
- ½ teaspoon salt
- ½ cup vegetable oil, or as needed
- Mix mashed potatoes, flour, onion, egg, black pepper, and salt together in a bowl until batter consistency.
- Heat vegetable oil in a skillet over medium heat. Drop 4-inch circles of batter into hot oil. Cook until golden brown, about 5 minutes per side. Remove with a slotted spoon and drain on paper towels. Repeat with remaining batter. 8
Footnotes and Sources
1. The Wall Street Journal, August 13, 2021
2. The Wall Street Journal, August 11, 2021
3. CNBC, August 11, 2021
4. Reuters, August 12, 2021
5. Howardcm.com, August 12, 2021
6. IRS.gov, September 20, 2020
7. Health.harvard.edu, October 28, 2019
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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