The Long and Short of it, week ending 22 Oct 2021

Publication Type: Market Commentaries

U.S. stock markets moved higher last week with the Dow Jones Industrial Average closing at a record
high and the S&P 500 Index finishing slightly off its record high set Thursday. Strong earnings
reports were the primary driver behind last week’s gains, overcoming concerns of lower profits due
to rising input and labour costs and production and shipping bottlenecks. Lower-than-expected
jobless claims, reported Thursday, also helped move markets higher. Three notable earnings misses
– Intel, Snap and IBM – helped push the Nasdaq Composite Index and the S&P 500 Index lower
Friday though analysts mostly considered these misses as outliers either because they were
considered exceptions (IBM) or because of the unique, specific nature of the misses (Snap, Intel).
Better-than-expected earnings reports, however, did not alleviate concerns of persistent inflation,
driving the 10-year U.S.Treasury rate 12bps higher through Thursday. The rate fell almost 6bps
Friday, likely reacting to weaker-than-expected earnings reports. At week’s end, the S&P 500 Index
rose 1.6% to 4,544.90, the Nasdaq Composite Index increased 1.3% to 15,090.20, the Dow Jones
Industrial Average gained 1.1% to 35,677.02, the 10-year U.S. Treasury rate rose 7bps to 1.64% and
the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.3%.

For More Detail read the following PDF.

The Long and Short of it, week ending 22 Oct 2021

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