Presented by Nicholas Wealth Management
November 15th, 2021
Weekly Market Update
In this week’s recap: Stocks tap the brakes after signs of higher inflation.
The Week on Wall Street
Stocks posted small declines last week as investors digested recent stock market gains and unexpectedly high inflation read.
The Dow Jones Industrial Average slid 0.63%, while the Standard & Poor’s 500 retreated 0.31%. The Nasdaq Composite index slipped 0.69% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.78%.1,2,3
Market Takes a Pause
After moving higher on Congressional approval of a $1 trillion-plus infrastructure spending bill, stocks drifted lower as investors took a breather after a weeks-long run-up in prices. A high October inflation report on Wednesday sent bond yields higher and stock prices lower, especially technology and other high growth companies. Energy also fell.4,5
Higher-than-expected inflation elevated investor worries that the Fed may be forced to accelerate its bond tapering schedule and hike interest rates sooner than planned. Stocks found firmer footing following the inflation-related sell-off, closing the week on a strong note, though it wasn’t sufficient to keep stocks from ending the week in the red.
HOT! HOT! HOT!
Rising prices appear to be showing no signs of moderating. The first reading on inflation was Tuesday’s release of the Producer Price Index, which saw wholesale prices rise 0.6% in October and register an 8.6% increase from 12-months ago.4
A day later the Consumer Price Index came in above consensus estimates, with prices climbing 0.9% from September 2021 and increasing 6.2% year-over-year. The 12-month increase was the sharpest such rise since 1990. The 12-month core inflation rate (excludes the more volatile food and energy sectors) was 4.6%, the fastest pace since 1991.5
Tip of the Week
Have you had the same internet passwords for years? Change them! In order to keep accounts secure, you should change your passwords often, never share them or write them down, and make them difficult. Never use your birth or anniversary date as a password.
Why Are Shareholders Freeing Up Their Capital?Tesla $TSLA stock dropped 12% yesterday. Many believe the selloff was due to Elon Musk's tweet asking users if he should sell 10% of his stock. David Nicholas joined Stuart Varney on Fox Business to discuss why he believes shareholders were freeing up their capital to buy Rivian $RIVN.
Ford's $7 Billion InvestmentAll eyes may be on Rivian, but Ford Motor Company is on fire right now. Its F-150 electric truck has secured over 160,000 pre-orders. David Nicholas joined Stuart Varney on Fox Business to discuss why Ford's $7 billion investment in autonomous driving is good news for its stock.
Inflation Could Cause heightened Volatility in the MarketPresident Biden thinking inflation is 'transitory' will come back to haunt his administration. Downplaying skyrocketing prices will have consequences in next year's midterms. David Nicholas joined Lauren Simonetti on Fox Business to discuss how this could cause heightened volatility in the market.
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1. The Wall Street Journal, November 12, 2021
2. The Wall Street Journal, November 12, 2021
3. The Wall Street Journal, November 12, 2021
4. CNBC, November 9, 2021
5. The Wall Street Journal, November 10, 2021
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