MWM Weekly Update

The Week of October 18, 2021

MWM Weekly Update

The Week of October 18, 2021

8 Ways 2021 Taxes May Be Different |
Along with the many other unusual things that have happened in 2021, this year will be an atypical tax year for many households.

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"Great leaders are almost always great simplifiers, who can cut through argument,
debate and doubt, to offer a solution everybody can understand."

– Colin Powell

Greetings, Everyone,

Today we learned that General Colin Powell passed away at age 84 from complications of Covid. Sara Berry, Linette Dobbins, Jennifer Guttridge, and I all had met him in a private reception a few years back. His story was inspiring, one of personal achievement and overcoming prejudice of a black man in the South and in the military. Meeting leaders like General Powell has been one of the blessings of working in our field. We were honored to have had those moments with him.

One of our friends and clients shared a powerful post that I’d like to share.  For a small amount of perspective at this moment, imagine you were born in 1900.  My own Grandmother Olive was born November 1899.  At age 14, World War I started and ended at age 18 with 22 million people killed.  Later in that year, a Spanish Flu epidemic hits and lasts until you are 20.  50 million people die from it in two years.

When you are 29, the Great Depression begins. Unemployment hits 25%, global GDP drops 27%. It lasts until you are 33. The country almost collapses. At age 39, World War II starts. At 41, the USA joins the War. At age 64, the Vietnam War begins and doesn’t end for years. Four million people died in that conflict. At 62, you have the Cuban Missile Crisis. Great leaders prevented a disaster.  At 75, the Vietnam War finally ends.

How did people survive all that? In summary, perspective is an amazing art. Let’s keep things in perspective. In the history of the world, there has never been a storm that lasted. Let’s be smart and help each other to get through our current challenges.

Lastly, thank you to our friend Julie for sharing this amazing picture of the fall color in her backyard. There is nothing more beautiful than nature's fall canvas.

Judith McGee, L.H.D., CFP®, ChFC®
Executive Vice President and Senior Lead Advisor

In the Markets

LAST WEEK
  • Despite a shaky start, Wall Street enjoyed a strong week of gains. A favorable start to corporate earnings season helped lift equities higher. Each of the major benchmark indexes posted solid weekly gains, led by the Nasdaq and the S&P 500. The dollar and Treasury yields slipped, while crude oil prices rose 3.5% to $82.25 per barrel. Despite the generally positive week, investors will continue to keep an eye on economic data and rising prices. Higher oil, gas, and other commodity prices could raise concerns about inflationary pressures and how they could drag down corporate profit margins. Materials shortages, rising wages, and shipping bottlenecks have driven up costs for producers. Many have passed these costs on to consumers, leading to more persistent inflation. Initial earnings data comes from banks and financial institutions. The next few weeks will see earnings reports from the bulk of companies in most sectors and may reveal the impact that inflation and supply demands has had on earnings margins so far in the third quarter.
  • Monday was the Columbus Day and Indigenous Peoples' Day public holidays but stock markets were open and bond markets were closed. The Dow and the S&P 500 fell 0.7%, while the Nasdaq and the Russell 2000 dipped 0.6% on what was a fairly slow trading day. Crude oil prices rose 1.5% to reach $80.51 per barrel, a multi-year high. Investors may be waiting for the next round of corporate earnings data to weigh the potential impact of rising energy prices, labor costs, and supply-chain bottlenecks.
  • Stocks fell again last Tuesday. Only the small caps of the Russell 2000 ended the day in the black, gaining 0.6%. The Global Dow (-0.4%), the Dow (-0.3%), the S&P 500 (-0.2%), and the Nasdaq (-0.1%) declined. Ten-year Treasury yields dipped below 1.6%, closing the day at 1.58%. Crude oil prices were little changed, while the dollar advanced 0.2%. Consumer discretionary, real estate, and utilities led the market sectors, while communication services, information technology, and health care declined by at least 0.5%.
  • Equities rose for the first time in four sessions last Wednesday. With inflationary pressures continuing to run hot, technology shares increased, as investors seemed to focus on companies better able to pass on higher costs to consumers. The Nasdaq led the surge, climbing 0.7%, followed by the Russell 2000 and the S&P 500, which climbed 0.3%. The Dow and the Global Dow broke even on the day. Treasury yields, crude oil prices, and the dollar declined. Among the market sectors, utilities (1.1%) and information technology (0.6%) advanced, while financials dipped 0.6%.
  • Stocks rallied last Thursday, buoyed by strong bank earnings reports and encouraging unemployment data. Each of the major benchmark indexes gained at least 1.0%, led by the Nasdaq and the S&P 500, which added 1.7%. The Dow gained 1.6%, the Russell 2000 climbed 1.4%, and the Global Dow advanced 1.1%. The dollar and Treasury yields eased for the second consecutive day, while crude oil prices rose to $81.53 per barrel. Materials and information technology gained 2.4% and 2.3%, respectively, to lead the market sectors.
  • The market advanced for the third consecutive day last Friday. Strong earnings data and stronger-than-expected retail sales provided encouragement for investors. The Dow advanced 1.1%, followed by the Global Dow (0.9%), the S&P 500 (0.8%), and the Nasdaq (0.5%). The small caps of the Russell 2000 slipped 0.4%. Ten-year Treasury yields climbed 3.8%, crude oil prices rose 1.2%, while the dollar was little changed. The market sectors closed Friday generally higher, with consumer discretionary (1.8%) and financials (1.5%) leading the pack.

THIS WEEK

The Federal Reserve's report on industrial production for September is available this week. The industrial sector has been advancing, despite supply-chain bottlenecks and labor shortages, which have led to increased costs. Data from the housing sector is also out this week, with reports on housing starts and existing home sales. Housing starts rose nearly 4.0% in August, although sales of existing homes fell more than 2.0%.

Source: Broadridge Investor Communication Solutions, Inc.

Articles & Education

Q3 Market Commentary

The Three Dimensions of Risk: Tolerance, Capacity, & Need

More wealth has been lost due to human emotions and the lack of sound, disciplined financial planning than to any bear market. The good news is that risk is quite manageable with the help of a trusted advisor and an understanding of three dimensions of risk: our own personal tolerance, capacity, and need.
Investment Term of the Week

Thought of the Week

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