The Long and Short of it, week ending 29 Oct 2021
Posted:Another strong week for U.S. stock markets with all three major indexes posting record levels.
Strong earnings reports again were the primary factor moving markets higher despite disappointing
Apple and Amazon earning releases and a weaker-than-expected increase in GDP. All three major
stock indexes moved higher almost every day last week, only pausing Wednesday. Thursday’s
weaker-than-expected GDP release (along with Apple’s and Amazon’s disappointing earnings
reports) and Friday’s as-expected PCE price index release highlighted concerns surrounding
persistently high inflation caused by input/labor shortages and production and shipping bottlenecks
and slowing economic activity. 10-year U.S. Treasury rates fell 8bps over the week, perhaps
reflecting the growing conviction the Fed will begin moderately tightening monetary policy resulting
in slowing economic growth. The U.S dollar, weaker by 0.3% through Thursday, strengthened over
0.8% Friday following the release of the Employment Cost Index and Personal Income and Outlays
reports, perhaps reflecting the same conviction. At week’s end, the S&P 500 Index climbed 1.3% to
4,605.38, the Nasdaq Composite Index gained 2.7% to 15,498.40, the Dow Jones Industrial Average
increased 0.4% to 35,819.59, the 10-year U.S. Treasury rate fell 8bps to 1.56% and the U.S. dollar (as
measured by the ICE U.S. Dollar index - DXY) strengthened 0.5%.
The Long and Short of it, week ending 29 Oct 2021
