Weekly Market Update with Brian Ransom 5 November 2021
Weekly Market Update: the Holiday Season Rally.
Welcome to the weekly market update from Signature Wealth Management. I’m Brian Ransom, Research Director from Signature Wealth and here’s what happened in the market this week.
The market continues to rally out of the September pullback and we are currently making new highs each day for this week. This rally is reflected in the equal weighted index as well indicating that the ride higher is broad based throughout the entire market.
In the news this week, Merck received its first authorization in the UK for its COVID-19 antiviral treatment. A few days later, Pfizer announced the results from a similar treatment that showed 89% effectiveness against COVID-19. And the labor market continues to show strength with unemployment falling to a fresh 4.6% low.
With regards to the labor market, we can see the sudden impact of the pandemic on unemployment with a large spike to 14.8%. This is the highest unemployment rate since the Great Depression. Fortunately, that spike was short-lived as unemployment fell at a rapid rate. Simultaneously, we have seen wide spread wage growth that is now above the 50-year average further indicating growing strength of the US labor pool.
Recall from previous market updates that the month of September is typically the worst month for market returns in the S&P 500. This is a statistically significant phenomenon that has a variety of explanations. Now that we have entered into the winter months, a different phenomenon is observed. The holiday months of November and December feature fairly strong returns typically explained by year end bonuses entering the market place, interest payments on bonds that come at the end of the year, and general jovial temperaments that naturally come with the holiday season. Keep in mind, however, that this phenomenon is not a rule and there are exceptions. The end of 2018, for instance, featured a strong correction of around 20% peak-to-trough.
For more information on this topic or a variety of other topics including market updates, financial planning, and wealth management please like, subscribe, and follow and we’ll see you next week.
1.FactSet Research Systems. (n.d.). S&P 500 (Interactive Charts). Retrieved November 5, 2021, from FactSet Database.
2.FactSet Research Systems. (n.d.). S&P 500 Equal Weight (Interactive Charts). Retrieved November 5, 2021, from FactSet Database.
3.FactSet Research Systems. (n.d.). S&P 500 (Historical Prices). Retrieved November 4, 2021, from FactSet Database.
4.JP Morgan Asset Management. Guide to the Markets. Slide 26 “Unemployment and Wages.” Updated October 31, 2021. Retrieved from https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/?c3apidt=p40886527386&gclid=Cj0KCQjwrJOMBhCZARIsAGEd4VHt_QYRONaCRttv4uZ7DNZWQiA1YjAJXM73oq4IKi8UzXWK6Z2LTncaAj7hEALw_wcB&gclsrc=aw.ds
Signature Wealth Management Group is registered as an investment adviser with the SEC. Signature Wealth only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.
Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.
Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. The use of words such as “will”, “may”, “could”, “should”, and “would”, as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.
Information is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein.
The S&P U.S. Style Indices measure the performance of U.S. equities fully or partially categorized as either growth or value stocks, as determined by Style Scores for each security. The Style series is weighted by float-adjusted market capitalization (FMC), and the Pure Style index series is weighted by Style Score subject to the rules described in Index Construction.
All information presented prior to an index’s Launch Date is hypothetical (back-tested), not actual performance. The Index returns shown do not represent the results of actual trading of investable assets/securities. S&P Dow Jones Indices LLC maintains the Index and calculates the Index levels and performance shown or discussed, but does not manage actual assets. Please refer to the methodology paper for the Index, available at www.spdji.com for more details about the index, including the manner in which it is rebalanced, the timing of such rebalancing, criteria for additions and deletions, as well as all index calculations.