I hope everyone had an enjoyable Thanksgiving.
In our October letter we highlighted our concern about the Inflation indicators escalating at an unsustainable pace. On the last day of the month, Chairman Powell finally acknowledged that he needs to retire the word “Transitory” when describing inflation. This change in language which suggested a quicker than anticipated rate increase by the Federal Reserve and the uncertainty over the new Omicron variant sent the markets into a tailspin at the end of the month.
Domestic equity markets finished mixed in November, all falling significantly from their intramonth highs. The Nasdaq 100 Index was the best performer closing 1.9% for the month. The Russell Microcap Index was the worst performer closing the month down 5.2%. Major Foreign markets sold off in November, the Spanish Stock market (IBEX) was down over 9%.
The chart below highlights major stock indexes and their corresponding changes from their highs.
The chart below highlights performance by sector.
Crude Oil dropped close to 20% in November after touching a 7-year high close to $83 a barrel in October. Most of the drop came over the last week of the month when the Omicron variant was disclosed with the renewed fears of curtailed global travel. The market is pricing in this scenario. If this variant does bring about a travel shutdown this sell off could prove to be temporary.
With the added uncertainty of the Omicron Variant and added Inflationary pressures, volatility has returned to the market. Our October newsletter mentioned this possibility. A common measurement of stock market volatility is the VIX Index. The graph below looks at the VIX in the recent 3 months.
As we go into December, we continue to look for increased volatility in both bond and stock markets. Market volatility is common and it’s our responsibility as advisors to navigate our clients during these turbulent times.
When we invest for our clients, we are long-term investors, not traders. It is important not alter long term plans and become active traders to time markets.
We feel the key to long term success is a balanced portfolio that is rebalanced over time to ensure proper risk allocation. We are monitoring the global markets and asset performance.
Each client’s risk tolerance and long-term objectives are different, and we are committed to the achievement of our clients’ long-term goals.
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 value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Each company's security affects the index in proportion to its market value. 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 Opinions expressed are those of the author and not necessarily those of Guardian or PAS. 2021-124911 Exp 8/22
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.
Registered Representative and Financial Advisor of Park Avenue Securities and Financial Representative of Guardian, AR insurance license #8401385 CA insurance license #0F94382
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