US Equity Markets dropped last week amid concerns about a potential slowing of economic growth and unease about the spread of the Delta Covid variant. The S&P 500 dropped 1.0% for the week and is now up 15.2% for the year. After 8 consecutive weeks higher, the Nasdaq fell 1.9% for the week to bring its gains down to 11.9% for the year, while the Russell 2000 (small cap stocks) fell sharply given economic concerns, down 5.1% for the week to reduce its gains for the year to 9.5%.
Global Equity Markets were mixed last week as a surge in Covid cases in Europe stopped the UK from easing some restrictions and offset modest strength in Asia. Developed Markets were down 0.6% for the week to bring their gains for the year to 8.1%. Emerging Markets rebounded from their recent declines, up 1.7% for the week, and are now up 3.8% for the year.
US Interest Rates declined further last week despite Fed Chairman Powell testimony that inflation has been worse than expected. The yield on the US 10-Year Treasury dropped to 1.29% last week from 1.36% the prior week even after the Consumer Price Index (CPI) for June showed a 5.4% year-over-year increase, its highest level since 2008.
Of Interest to Us
A preliminary measure of Consumer Sentiment for July hit its lowest level in 5 months and was well below expectations. The primary cause of the decline was consumers' expectations that inflation will increase in the months ahead. Will this impact what has been a robust consumer spending appetite?
for the week ending 7/16/2021
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