Newsletter - September 2021
Upcoming Government Reports & Holidays
Sep 01
Sep 02
Sep 02
Sep 03
Sep 06
Sep 07
Sep 07
Sep 09
Sep 09
Sep 10
Sep 10
Sep 14
Sep 16
Sep 16
Sep 21
Sep 24
Sep 24
Sep 27
Sep 28
CONSTRUCTION SPENDING REPORT
US INTERNATIONAL TRADE IN GOODS & SERVICES REPORT
MANUFACTURERS' SHIPMENTS, INVENTORIES & ORDERS - FULL REPORT
EMPLOYMENT SITUATION REPORT
LABOR DAY
QUARTERLY FINANCIAL REPORT - RETAIL TRADE
QUARTERLY FINANCIAL REPORT - MANUFACTURING, MINING, WHOLESALE TRADE
QUARTERLY SERVICES SURVEY
BUSINESS FORMATION STATISTICS
MONTHLY WHOLESALE TRADE: SALES & INVENTORIES
PRODUCER PRICE INDEX REPORT
CONSUMER PRICE INDEX REPORT
ADVANCE MONTHLY SALES FOR RETAIL & FOOD SERVICES REPORT
MANUFACTURING AND TRADE: INVENTORIES & SALES REPORT
NEW RESIDENTIAL CONSTRUCTION REPORT
NEW RESIDENTIAL SALES REPORT
PRELIMINARY US IMPORTS FOR CONSUMPTION OF STEEL PRODUCTS
ADVANCE REPORT ON DURABLE GOODS - MANUFACTURERS' SHIPMENTS...
ADVANCE ECONOMIC INDICATORS REPORT
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Key Events That Moved the Market in August 2021
The following is a review of US and world events from the last month. Please be advised that this content is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.

S&P 500 Index (SPX) - Daily Chart - Aug 2- 31, 2021 (Source: Tradingview)

August 2
  • The broader market got off to a strong start but the rally faded fast once the Dow reached another record high.
  • Markets are having a difficult time finding a solid direction with strong earnings on one hand and high valuation fears on the other, both taking place within the context of delta variant fears.
  • The ISM Purchasing Managers Index came in quite solid 60.6% in June (above 50 indicates expansion), but apparently, not solid enough to keep the market momentum jumping.

August 3
  • It was another choppy day that ended in a record high for the S&P 500 index; the Dow just points shy of another record close.
  • Virus fears are beginning to weigh on the markets as indoor mask mandates are once again front and center of public concern.
  • Positive news for the dollar, factory orders came in at 1.5%, higher than the 1.0% as analysts had expected. 

August 4
  • It was a downbeat day with the S&P 500 coming off a record close on Tuesday but ending the day in the negative along with the Dow which fell 323 points.
  • A weak ADP jobs number set the tone, with 330,000 jobs added in July and far from the 690,000 new jobs Wall Street had estimated.
  • However, ISM non-manufacturing PMI relieved the markets slightly with signs of strength, coming in at 64.1, above analyst consensus of 60.5.

August 5
  • Markets made an aggressive rebound today with the S&P and the Nasdaq hitting record highs, and the Dow not too far behind.
  • Strong earnings and economic data lifted the markets following a strong reading on jobless claims, falling from a week ago to just shy of pandemic lows.
  • Markets await tomorrow’s jobs report as companies deal with a “worker shortage” despite high levels of unemployed prospective workers.

August 6
  • A stellar jobs report boosted the Dow and S&P 500 to record highs, though the Nasdaq lagged behind.
  • The economy added 943,000 jobs in July, far above the 870,000 expected.
  • The unemployment rate fell to 5.4%.
  • Today’s employment report was reopening-centered as the largest employment gains were in hospitality and leisure followed by education.
  •  Most companies, however, are still grappling with a severe worker shortage.

August 9
  • The markets meandered this Monday with mixed results but still relatively quiet.
  • The JOLTS report came in high at 10.073 million, topping estimates of 9.28 million.
  • Bear in mind that JOLTS represents new job openings in the economy; although this can be seen as a positive factor, the worker shortage might have muted any market-moving significance this report would typically have.

August 10
  • It was a mixed day for the markets though the Dow was able to hit another record high, up 162 points; the Nasdaq on the other hand lagged behind.
  • Positive news on an infrastructure deal, around $1 trillion, boosted infrastructure stocks.
  • Crude oil also rebounded after falling to a three-week low on Monday.
  • The inflation narrative still hangs over the market, and traders await tomorrow's CPI report.

August 11
  • It was another choppy day on Wall Street with the Dow and S&P reaching new highs and the Nasdaq lagging once again.
  • A tame read on inflation helped set the record early on as the July Consumer Price Index rose 0.5% month over month, in line with analyst expectations.
  • Core inflation rose 4% year over year, slowing down slightly from the surge we saw in June.
  • Traders await tomorrow’s Producer Price Index to get a more comprehensive read on the July inflation picture.

August 12
  • Another quiet run to a record high, the Dow and S&P 500 reaching new milestones with the Nasdaq snapping a two-day losing streak.
  • A hotter-than-expected Producer Price Index gave markets some pause early in the session.
  • Core PPI in July was up 1% double the expected 0.5% consensus.
  • Jobless claims fell for a third straight week, indicating that the labor markets may be heading in the right direction.

August 13
  • Today was yet another quiet string of record closes with the Dow barely eking out a gain but still managing another record high and the S&P also reaching a new high.
  • Defensive groups were among the bigger performers, indicating a lesser appetite for risk for today.
  • This follows consumer sentiment which fell to its lowest level in ten years, coming in at 70.2 when 81.2 was what analysts had expected.

August 16
  • The Dow had a volatile 400 point dive and reverse with the S&P 500, Nasdaq, and Russell 2000 indices doing the same, more or less.
  • It appears that the big factor boxing in the so-called “reflation trade” is the delta variant.
  • Industrial, material, and travel and leisure stocks got hit hard today despite the market’s new highs.
  • There’s also concerns about the Federal Reserve moving too fast and too soon with regard to potential tapering of its $120 billion in bond purchases.
  • Traders await the Jackson Hole symposium later this month to hopefully get some more guidance on the near-term monetary landscape. 
  • Although not a major global player, Afghanistan and the problematic withdrawal of American citizens and allies may have an effect on markets considering the perception of President Biden’s political credibility and how that may affect his infrastructure proposal in the days to come.

August 17
  • Today was a down day in the market unlike any we’ve seen in quite a while with the Dow falling 505 points before clawing back a good chunk of the losses.
  • Other stock index futures exhibited a similar pattern—they all fell, made a partial comeback, and closed half the distance in the negative. 
  • A combination of soft US retail sales and Monday’s Chinese factory output and retail data—both missing the mark—likely culminated in yesterday’s soured market action. 
  • It’s possible that investors read too much into those reports, seeing them as harbingers of slowing domestic and global growth. 
  • The Delta variant and Fed tapering fears also probably played a role in dropping the market initially.

August 18
  • It was a downbeat trading day though on light summer volume.
  • The Fed released its FOMC minutes and it appears as if there’s no doubt tapering is on the table.
  • Though tapering can cause “tantrums” in the market, the bright side is that the Fed wouldn’t be tapering had it no compelling reason to do so, which typically points to economic recovery and strength.

August 19
  • Stock futures fell sharply in overnight trading as investors weighed the full implications and potential impact of stimulus withdrawal. The Dow futures (YM) plunged over 300 points premarket with all other major index futures following suit.
  • The overnight selloff follows weakness across the globe, with markets across Asia and Europe down 1-2% overnight.
  • Today’s early morning action seems like a delayed response to yesterday’s Fed release—even though the minutes from its last meeting were largely consistent with Fed members' public statements and testimony since then. 
  • At the end of the day, the indices clawed back to recoup most of its losses, ending the day moderately negative.
  • Reduced growth expectations in the US and abroad, particularly with weak China data, is what’s pressuring today’s market.

August 20
  • Stocks closed out a tumultuous week with surprisingly strong gains,
  • However, it wasn’t enough to lift the indices to positive territory for the week.
  • A number of wild cards are in play, including the Federal Reserve (tapering), the delta variant, and how that might affect consumer sentiment and spending amid supply and labor constraints.
  • Next week may provide more answers as the Jackson Hole conference gets nearer.

August 23
  • Stocks burst higher to start a new week closing in on a fresh record high on easing covid fears and some optimistic news on China’s economic growth,
  • New data shows reduced case counts in covid hit spots just as the FDA gave its formal approval for Pfizer’s covid vaccine,
  • July existing home sales came in strong at 5.99 million, topping estimates of 5.83 million.

August 24
  • Markets drove modestly toward another milestone as the story of “peak Covid” gained traction on Wall Street, prompting investors to begin bargain hunting.
  • As far as bigger ticket items are concerned, new home sales came in weaker than expected as high home prices appear to be dissuading demand.

August 25
  • Another session of upward drift into new records, as the S&P 500 traded above the 4,500 level for the first time; 10-year yields rose to 1.3%, indicating that delta variant fears may be easing.
  • There aren’t any major numbers that could get the markets moving today, other than durable goods, which came in a bit better than expected, a month over month 0.7%, slightly above the expected 0.5%. 

August 26
  • The market’s main focus right now is on the possibility that more detail will emerge on a possible Fed taper at the virtual Jackson Hole symposium this week. The focus is mainly on Chairman Jerome Powell’s speech tomorrow morning. Will he reveal any details about tapering, and its timing? 
  • The government’s second estimate for Q2 gross domestic product (GDP) growth of 6.6% matched the average analyst estimate. 
  • Jobless claims of 353,000 were in line with estimates, but up slightly.

August 27
  • Today saw a strong rally to end an upbeat week on Wall Street following a speech by Fed chair Jerome Powell suggesting a patient approach to taking back the extraordinary monetary stimulus that has been in place since last year.

August 30
  • Today was a mixed close for the markets as the Dow ends the day in the red while the S&P 500 and Nasdaq hit record highs.
  • This week, the August payrolls report comes Friday which could shape market action and Fed policy as the month of September starts.
  • What to watch out for: analysts think another solid jobs report might be the last straw on the camel’s back to get the Fed to start tapering its $120 billion a month bond-buying program. 
  • The last three months saw job gains of more than 800k, so judging from those numbers, it looks like the Fed has been moving toward its goal to strengthen the labor market, yet Powell made it clear we haven’t come far enough.

August 31
  • Minus any sort of huge selloff today, the broader market is on track for its seventh-straight winning month.
  • That would be the longest winning streak for the S&P 500 since 2017.
  • Still, investors should avoid becoming complacent as markets go up and down, and September has a seasonal reputation for being one of the weakest months of the year. 
  • Consumer confidence in August came in with discouraging numbers, at 113.8 when analysts were hoping for 124.0.
  • We’ve still got major employment numbers this Wednesday and Friday, both of which can alter the Fed’s tapering decisions, so perhaps that lack of confidence somehow reflects all of this stimulus and interest rate uncertainty.
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There is a substantial risk of loss in trading futures, options and forex. Past performance is not necessarily indicative of future results. Margins are subject to change at anytime without notice. All material herein was compiled from sources considered reliable. However, there is no expressed or implied warranty as to the accuracy or completeness of this material.