The Week on Wall Street
The stock market powered to record levels last week amid talk of Fed tapering and a deceleration in new Delta variant cases.
The Dow Jones Industrial Average gained 0.96%, while the Standard & Poor’s 500 increased 1.52%. The Nasdaq Composite index led, picking up 2.82%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.39%.1,2,3
Stocks surged to begin the week as investor sentiment improved on news of the FDA’s approval of its first COVID-19 vaccine, a strong housing number and comments by the Federal Reserve Bank-Dallas president that he would support delaying tapering if the Delta variant spread worsened.
Stocks continued their climb through midweek, pushing the S&P 500 to another record high and the NASDAQ Composite above 15,000 for the first time. The S&P 500 and NASDAQ Composite closed the week at record highs following Fed Chair Powell’s comments that Fed is likely to begin winding down its monthly bond purchases (aka tapering) by year-end, though no interest rate hikes were imminent.4
At last week’s Jackson Hole Economic Policy Symposium, Fed Chair Jerome Powell’s speech on Friday provided further insights into Fed plans to begin tapering. Powell said that the Fed may likely commence tapering prior to year-end, adding that the wind down of bond purchases should not be seen as a signal for future rate hikes. Powell emphasized that labor market conditions remain short of the Fed’s target for maximizing employment. He also reiterated his case for why inflation remains a transitory phenomenon.4
With a number of Regional Federal Reserve Bank presidents already supportive of tapering, investors may see more definitive steps coming out of next month’s FOMC (Federal Open Market Committee) meeting.
T H E W E E K L Y R I D D L E
The more you take away, the bigger I become. What am I?
LAST WEEK’S RIDDLE: Aaron is the brother of Bob. Bob is the brother of Cody. Cody is the father of Dan. So how is Dan related to Aaron?
ANSWER: Aaron is Dan’s uncle.Posted on