September 7, 2021
Market Performance For The Prior Week
Disclaimer: Past performance is no guarantee of future performance
The Good News
The Delta wave shows signs of peaking
And earnings remain strong
Global 🌍 earnings estimates kept rising in August.
The MSCI EAFE had the largest ⬆️ revisions, but overall the #SPX500 is still leading the earnings advance.
YTD returns in USD: #SPX500 +22%, MSCI EAFE +12%, MSCI EM +3%. At the end of the day, #stocks follow profits. @Factset pic.twitter.com/EQSm96ymkz
— Matthew Miskin, CFA (@matthew_miskin) September 1, 2021
Small businesses continue to forecast more hiring
New record surges in number of small businesses with job openings (blue, 50%) and plans to continue to hire in the next few months (orange, 32%) per @NFIB pic.twitter.com/POlnAzJJXD
— Liz Ann Sonders (@LizAnnSonders) September 7, 2021
The Mixed News
Wages are probably going to need to continue increasing to attract workers
Job openings and worker pay both rising to record levels. pic.twitter.com/eIwkpQXGXS
— Peter Mallouk (@PeterMallouk) September 2, 2021
The Bad News
The Delta wave continues to dampen the outlook
Wall Street analysts are seeing a more significant slowdown in U.S. labor-market and GDP growth than they'd expected. Here's Goldman Sachs cutting its forecast: https://t.co/vLkHqCx9GX
— Lisa Abramowicz (@lisaabramowicz1) September 7, 2021
Goldman downgrades outlook again: “We now expect GDP growth of 3.5% in Q3, 5.5% in Q4 (previously 6.5%)”
— Bill McBride (@calculatedrisk) September 6, 2021
And it played a big role in last weeks huge jobs miss
BREAKING! US Nonfarm #payrolls rose by just 235 K in August, almost 500K less than expected! pic.twitter.com/Q9LMX62ynY
— jeroen blokland (@jsblokland) September 3, 2021
Restaurants LOST 41,500 jobs last month, a clear sign of the impact of the delta variant.
— Jonathan Maze (@jonathanmaze) September 3, 2021
And corporations continue to worry about supply chains/price increases
Take a look at the respondents from the latest ISM Manufacturing survey. Note the consistent theme…https://t.co/7TMfDJi77q pic.twitter.com/puuUumyX79
— Charlie Bilello (@charliebilello) September 2, 2021
The State Of The Market
The bad news is not stopping investors, especially retail investors
Source: Financial Times (Joshua Oliver)
And Fidelity is betting these flows continue
Fidelity Investments plans to hire another 9,000 employees this year to help its businesses keep pace with the surge in stock-trading demand https://t.co/7iIg7SLEDz
— WSJ Markets (@WSJmarkets) August 31, 2021
I’d also expect an increase in stock buybacks and dividends
Companies will probably use their record amounts of cash to boost share dividends and buybacks, since corporate balance sheets are on average in better shape than they were pre-pandemic: TS Lombard via @SoberLook pic.twitter.com/GUQyIuhKds
— Lisa Abramowicz (@lisaabramowicz1) September 2, 2021
And it’s time to focus on fundamentals at this stage in the market cycle
Growth factors aren’t working as of late…
Value factors have also stagnated. …
If it’s not G or V than what is it?
Regardless of size or style, positive EPS revisions is what investors are looking for! That’s common for where we are in the #marketcycle. @KellyCNBC pic.twitter.com/7SccDO4VLJ
— Michael Kantrowitz, CFA (@MichaelKantro) September 2, 2021
But, then again, September is typically a weak month
The momentum is on our side, though
A strong first 8 months of the year for the S&P 500 (>15%) has historically meant a bullish last 4 months.
The final 4 months have been positive 12/14 times this has happened since 1954. $SPY $QQQ $FB $AMZN $AAPL $NFLX $GOOGL pic.twitter.com/eBhuxHiqST
— David Marlin (@Marlin_Capital) September 1, 2021
Updated the table on returns from early #Solana funding rounds to reflect the recent surge.
– $3.17 million invested in the Seed ~3.5 years ago is now worth $14.46 BILLION.
– 4,562x return
– 1,068.49% IRR
Best seed investment ever? pic.twitter.com/ZMv8FCz7im
— Packy McC◎rmick (@packyM) September 7, 2021
Threads Of The Week
1/ Lessons From The Tech Bubble:
Last year, I spent my winter holiday reading hundreds of pages of equity research from the 1999/2000 era, to try to understand what it was like investing during the bubble
A few people recently asked me for my takeaways. Here they are – pic.twitter.com/41nTJdrFR1
— Corry Wang (@corry_wang) January 2, 2021
At 40, Jim Simons left a famed math career to launch the most successful hedge fund ever: Renaissance Tech.
Even though it only won 51% of trades, the fund made 66%/yr for 30yrs (Simons worth = $25B). It's a story of genius, but also of how hard it is to beat markets.
— Trung Phan 🇨🇦 (@TrungTPhan) August 8, 2021
Story Of The Week
James Simons, Robert Mercer, Others at Renaissance to Pay Up to $7 Billion to Settle Tax Probehttps://t.co/Dnn9w10Mzx
— Eddy Elfenbein (@EddyElfenbein) September 3, 2021
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