Last week, the S&P 500 (SPY) fell during a short trading week. Multiple factors were weighing on investor sentiment. First was September’s history for being a weaker month for stock performance. In addition, the previous week’s August payrolls miss seemed to linger on investors’ minds due to concerns that the delta variant of COVID was slowing the rebound in the economy. The real estate sector led declines as long-term interest rates increased. Consumer staples and utility stocks performed the best. In terms of market cap, the small-cap Index underperformed the market after two strong weeks of outperforming the larger benchmarks. Growth stocks also outperformed Value stocks. I’ll discuss this and more below….(Please enjoy this updated version of my weekly commentary published September 15, 2021 from the POWR Value newsletter).
Five of the last seven trading days have been in the red. While I don’t believe we are headed for a bear market, there’s no question of bearish sentiment. Last week, we saw four straight days of losses. In addition to the August payrolls miss, investors were also concerned about political uncertainty. In previous weeks, it was monetary policy that was front and center.
Now, there is a concern over fiscal policy and the infrastructure bill. We learned last Wednesday that Senator Joe Manchin only backs $1 trillion of President Biden’s $3.5 trillion proposed spending plan. It’s my belief that the Street is counting on this package, and it doesn’t go through; we could see heightened volatility.
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