Friends,

Once again most major US equity indexes hit record highs during the month of August despite a drop in consumer confidence and the aggressive spread of the Delta variant.

Second quarter gross domestic product which measures the final market value of all goods and services produced increased by 6.60% in the US evidencing a significant recovery in the economy.

In the US, the S&P 500, Nasdaq 100, and Russell 2000 growth indexes were the best performers in August notching gains of 2.90%, 4.00% and 2.13%. Crude Oil was down 6.50% after hitting a 6 year high in July. Natural Gas was up another 20% in July. Since August of last year Natural Gas is up over 65%. As winter approaches, home heating costs will be appreciably more expensive than last year. The graph below highlights how both Crude Oil and Natural Gas prices have increase in the last year.

Crude Oil ( White ) Natural Gas ( Orange )

SOURCE: NASDAQ

Internationally the Hang Seng continued to underperform slipping another 1.50%. The index is

now down close to 4% YTD. European indexes were up modestly in August led by the FTSE 100.

As we spoke about in our July newsletter, inflation concerns are still a point of concern for the markets. The Federal Reserve Governor Jay Powell spoke at the annual economic policy symposium in Jackson Hole Wyoming reiterating the increase in inflation is largely “transitory”. The Federal Reserve will continue to keep the Federal Funds Rate at historical lows. As we noted in July, we are keeping a keen eye on this as prolongated inflation readings that are not transitory could push the Federal Reserve to increase overnight rates at a more accelerated pace. Currently, the market is pricing in the first-rate hike in the 4th quarter of 2022.

As always if you have any questions feel free to reach out and enjoy the rest of the summer.

Best, Bob

This material is intended for general public use and is for educational purposes only. By providing this content, Park Avenue Securities LLC is not undertaking to provide any recommendations or investment advice regarding any specific account type, service, investment strategy or product to any specific individual or situation, or to otherwise act in any fiduciary or other capacity. Please contact a financial professional for guidance and information that is specific to your individual situation. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. The Hang Seng Index is a free float-adjusted market-capitalization-weighted stock-market index in Hong Kong. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. NASDAQ Composite Index is a market