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 )
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.
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
Jeremy has been in the financial advisory business since 2005 after graduating from Fordham University’s School of Business. He joined Tomoro as a managing partner in 2014. During his tenure, Jeremy has consistently excelled as an advisor in both the personal household and business planning arena. As a managing partner, Jeremy also serves as a mentor to all associates and is hands-on in supporting Tomoro’s growth planning. He has completed various curriculums and certifications, such as New York University’s graduate studies in financial planning, is a Certified Exit Planning professional, and Investment Advisor Representative. He and his family reside in Colts Neck, NJ.
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The 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. The Hang Seng Index (HSI) is a market-capitalization-weighted stock market Index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong.
Indices are unmanaged, and one cannot invest directly in an index. Past performance is not a guarantee of future results. All investments contain risk and may lose value. Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit, and inflation risk. Equities may decline in value due to both real and perceived general market, economic, and industry conditions.
Statistics sources from Central Bank Rates and Bloomberg.
2021-115741 Exp 2/23