Presented by Nicholas Wealth Management
November 2nd, 2021
Weekly Market Update
In this week’s recap: Earnings build while GDP slows.
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The Week on Wall Street
A fresh wave of positive corporate earnings surprises sent markets to new record highs last week.
The Dow Jones Industrial Average increased 0.40%, while the Standard & Poor’s 500 rose 1.33%. The Nasdaq Composite index picked up 2.71% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was up 0.68%.1,2,3
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Earnings Drive Market
The week kicked off with the Dow Jones Industrials and S&P 500 index setting record highs as the financial markets carried over the previous week’s price momentum.4
Stocks continued to climb on a string of forecast-beating earnings results. With about half of the S&P 500 constituent companies having reported earnings, more than 80% of them have beaten Wall Street analysts’ consensus estimates. Based on these results, earnings for all S&P 500 companies are expected to come in approximately 39% above the third quarter of last year. (Forecasts are based on assumptions, and may not materialize.) Stocks overcame disappointing earnings from two mega-cap tech names on Friday to maintain the week’s solid gains.5
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GDP Growth Slows
While businesses managed to post strong earnings in the third quarter, the first look at economic growth came in below consensus estimates. The Gross Domestic Product (GDP) grew at a 2.0% annualized rate in the third quarter, a slowdown from the two previous quarters, each of which posted annualized growth rates in excess of 6%.6
The spread of the Delta variant and backlogs in the supply chain were two major factors dragging on economic activity.
Tip of the Week
Set aside a half-hour to organize your financial documents. It makes sense for tax season, and it makes sense all year.
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Media
Corporate tax revenue pre-2017 tax cut: $297 billion
Corporate tax revenue today: $371 billion
David Nicholas joined Maria Bartiromo on Fox Business last week to discuss why the Democrats’ 15% corporate minimum tax would lower revenue and create fewer Elon Musk’s!
With covid cases rapidly declining, how will this impact the markets? David Nicholas joined Stuart Varney on Fox Business last week to discuss why this is good news for the overall economy and market.
Be sure to subscribe to our YouTube page for all of David’s media commentaries CLICK HERE!
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CITATIONS:
- The Wall Street Journal, October 29, 2021
- The Wall Street Journal, October 29, 2021
- The Wall Street Journal, October 29, 2021
- CNBC, October 24, 2021
- CNBC, October 28, 2021
- The Wall Street Journal, October 28, 2021
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