The Long and Short of it, week ending 19 Nov 2021

Publication Type: Market Commentaries

Divergence in the major stock indexes last week with the S&P 500 and Nasdaq Composite Indexes
increasing and the Dow Jones Industrial Average falling. A better-than-expected retail sales release
and strong earnings reports moved markets higher through Tuesday though re-emerging fears of
inflation and a more aggressive Fed pressured markets lower on Wednesday. The 10-year U.S.
Treasury rate behaved oppositely, increasing 7bps through Tuesday and then falling almost 6bps
Wednesday with increasing expectations of a more aggressive Fed precipitating slower economic
growth. Rising Covid cases in Europe and Austria’s lockdown announcement increased concerns of
slowing global economic growth and raised the possibility of rising Covid cases in the U.S. These
concerns pushed the Nasdaq Composite Index higher (stay-at-home stocks benefiting), the Dow
Jones Industrial Average lower (lockdown-free stocks hurt) and strengthened the U.S. dollar
(because of its appeal as a safe-haven investment and because of likely continued easy-money
policies in Europe in the face of renewed lockdowns). At week’s end, the S&P 500 Index increased
0.3% to 4,697.96, the Nasdaq Composite Index rose 1.2% to 16,057.40, the Dow Jones Industrial
Average fell 1.4% to 35,602.18, the 10-year U.S. Treasury rate decreased 2bps to 1.55% and the U.S.
dollar (as measured by the ICE U.S. Dollar index - DXY) strengthened 0.9%.

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The Long and Short of it, week ending 19 Nov 2021


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