Monthly Market Insights from Bill Schiffman – November 2021
“Trick or treat?” Halloween is this weekend, and the dentistry profession is gearing up for its busy season. Children of all ages will be donning costumes and accumulating toothsome sweet delicacies. It’s honestly a terrific holiday as normal boundaries are lifted. Folks can assume the identity of someone (or something) that they’ve longed to be.
My wife and I have wished to inhabit other bodies this month as we both contracted COVID-19. Lynne is fortunately on the improve, but I still have a lingering cough, fatigue, and brain fog after three weeks. We were both fully Pfizer vaccinated and quite careful about cleanliness and contact. I guess that we just didn’t beat the statistics. The vaccine was supposed to be 93-95% effective, but we hit the double zero on the roulette wheel. We didn’t go to France because of virus worries, but still got it in the good old USA. I wrote last month about irony, and now we’re living it. No treat, that’s for sure.
Fortunately, the markets have not played their usual October tricks. This is historically a fallow period for stocks, but this month had some upside surprises. Investors bought the September dip and the major averages all had solid performances. Despite the benchmark ten year Treasury rising to almost 1.7% in yield last week, bonds calmed down toward the 1.55% mark. Fears of rising inflation are certainly apparent, but animal spirits have not been adversely affected. We’re moving through this quarter’s earnings season with powerful results in almost all sectors. Supply chain problems hampered some of the transportation and defense stocks, but most large technology companies reported strong growth. Financials and energy stocks led the parade. Fixed income under-performed slightly and precious metals were flat.
My take on things is that many major corporations still have fortress-like balance sheets. Perhaps more importantly, it seems as though they have quickly figured out a way to pass rising prices on to their customers. As long as rates stay low, there are frankly few alternatives to the stock market. Pent-up demand for travel and recreation keeps growing, and one day most of us will be comfortable being out in public again. The specter of COVID still is a cloud over our heads, but documented cases are declining in most areas.
It will be interesting to see how the remainder of 2021 plays out. President Biden is having a difficult time getting an infrastructure bill through Congress, and there’s certainly no clarity about tax policy. The last couple months can be a time of selling in the markets to harvest capital losses. Stock performance in 2021 has led to almost no losing positions in portfolios, however, and so this activity should be muted. We’ll be taking advantage of the few opportunities that do exist to lessen your tax bite. RC and I will continue to monitor conditions and suggest changes if warranted. Please don’t hesitate to reach out to us with questions or concerns.
We close this month’s missive on a bittersweet note. Ruth Franklin, our invaluable administrative goddess, is leaving W3 to become a full-time grandma. It’s not going to be easy filling her shoes, but she’s really excited about her new gig.
hanks as always for your continued trust and support. I apologize for the brevity of this installment, but I’m overdue for my new habit – an afternoon nap. Take care and stay safe.