Monday Morning Market Insights: Last Week in Review with Rusty Vanneman, Vol. 24

Happy Monday. Hope you were able to stay cool last week. It was a hot one. Also hope you also had a great weekend and enjoyed Father’s Day and the longest day of the year. It was hopping here in Omaha with the College World Series opening, the U.S. Swim Trials, and a wedding reception.

Markets Update

It was also hopping in the markets last week. The week ended up being the worst in 4 months for the S&P 500 and the worst for the Dow Jones Industrials since last October.    

Still, the overall U.S. market only lost nearly 2% last week. The S&P 500 also did hit a new all-time high early last week. Other indices remain close to all-time highs. The market is still up nearly 5% for the quarter and over 11% for the year. It was only the “worst” week in a while because we have had so many great weeks over the last year. 

Updates from the Fed

The primary driver for the move was the shift in official Federal Reserve language. Wednesday’s FOMC meeting represented the first significant derailment of the recovery’s “Goldilocks outcome.” This included the Fed’s official expectations for inflation moving notably higher, and their expectation for two rate hikes sooner than expected (by the end of 2023). 

Some of the highlights from the Fed last week included the Summary of Economic Projections showing two hikes in 2023, with seven members of the committee (almost certainly all regional Fed Presidents, who are not permanent voters) expecting hikes in 2022. The median FOMC member sees core inflation up 3.0% this year (versus 2.2% in March) and raised 2022’s forecast to 2.1% from 2.0%. Growth was also raised for 2021 (to a 7% median forecast) and 2023 (to 2.4% median), while the median unemployment expectation is 3.8% by the end of next year. 

Deeper Dive

Arguably another consideration for the last week’s movement was profit-taking in cyclical stocks (such as small caps and value stocks) which had easily gathered the most flows, attention and favor this year. Last Thursday, for example, according to Morgan Stanley, secular growth stocks outperformed cyclicals by nearly 5% – in one day!  Growth stocks were actually higher last week and have now outperformed value stocks by over 8% this month!

Is this a tide change in relative performance? It could be, but it also shows the dangers of headline investing. The markets are a leading indicator of the economic data, while headlines of course lag the data. For example, cyclicals started to notably outperform last year in the depths of economic weakness; and now, as economic growth and inflation data are racing higher (at least for now), the markets are already apparently moving on to what might come next in the back half of 2021. This could mean that economic growth, while still strong, could slow. It also means that inflationary pressures should also cool (though could still be above-average). 

Bottom line, we believe the stock market outlook remains bullish. The overall backdrop really hasn’t changed: the economy is getting stronger, the Fed remains very supportive, and the momentum in the market remains net bullish. We believe investors should remain invested and remain diversified. 

Given the recent equity market weakness, it was a strong week for the U.S. dollar last week. After hanging around and holding above 5-year lows, the Bloomberg U.S. Dollar Index  is now moving above various moving averages for the first time in months. This is a signal for more dollar strength. 

Next week looks to be a busy one with Fed Chair Powell testifying in front of Congress, GDP data, Amazon Prime Day, Fed stress tests, and more. 

Bitcoin last week moved slightly lower but had a rough weekend and is starting off the week moving even lower. Current price (as of this writing) is just above $32,000. That’s half of the price from mid-April. 

Speaking of crypto, the next episode of Orion’s Weighing Machine publishing this week will feature Chris King from Eaglebrook Advisors. The fascinating interview talks about the future of crypto and how advisors and investors should be able to invest in it in the future.

For more resources on the economy and markets, including partner content, please review the Orion Portfolio Solutions Financial Advisor Success Hub.

As always, please let me know if you have any feedback or questions. You can reach me at

Have a great week!



The CFA is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit

The CMT Program demonstrates mastery of a core body of knowledge of investment risk in portfolio management. The Chartered Market Technician® (CMT) designation marks the highest education within the discipline and is the preeminent designation for practitioners of technical analysis worldwide. To learn more about the CMT, visit

About Rusty Vanneman, CFA, CMT, BFA
Rusty Vanneman serves as the Chief Investment Strategist for Orion Advisor Solutions. An industry veteran with more than 30 years of investment experience, Rusty creates relevant market- and platform-related content that supports deeper, more engaging conversations with advisors and investors, educating key internal and external audiences on Orion Portfolio Solutions’ strategies and resources to help deliver favorable investor outcomes, and helps identify new investment offerings to meet growing marketplace demand.  Rusty is a host of Orion’s The Weighing Machine weekly podcast, Orion’s monthly Weighing the Risk podcast, and authored the book “Higher Calling: A Guide to Helping Investors Achieve Their Goals.” Rusty has managed multiple mutual funds and hedge funds during his career and was named one of the Top 10 Portfolio Managers to Watch by Money Management Executive.* Prior to Orion’s acquisition of Brinker Capital in 2020, Rusty was the Chief Investment Officer for Orion Advisor Solutions and prior to that was the President and Chief Investment Officer of CLS Investments.  Before joining Orion in 2012, Rusty served as the Chief Investment Officer and Managing Director for a multi-billion-dollar registered investment advisor (Kobren Insight Management) in the greater Boston area. His 11-year tenure at the RIA included a five-year span when the firm was owned by E*TRADE Financial where he also served as the Senior Market Strategist for E*TRADE Capital. Prior, Rusty was a Senior Analyst at Fidelity Management and Research (FMR Co) in Boston. Additional work experience includes Thomson Reuters, General Electric, and as a cattle ranch hand in the Nebraska Sand Hills. Rusty received his Bachelor of Science in Management from Babson College in Wellesley, Massachusetts, where he graduated with high distinction. He holds the Chartered Financial Analyst (CFA®) designation and is a member of the CFA Institute. He is also a Chartered Market Technician® (CMT) and is a member of the Market Technician’s Association (MTA). He is also a Behavioral Financial Advisor (BFA). *RUSTY VANNEMAN MONEY MANAGEMENT EXECUTIVE AWARD. Rusty Vanneman, CFA, CMT, was selected as a “Top 10 Fund Managers to Watch” in 2017 by Money Management Executive. Money Management Executive is an unbiased, third-party publication covering the asset management industry. Money Management Executive chose the list of managers to watch by screening Morningstar data from funds with a single manager, ranked as having the best three-year annualized returns in their respective categories. The list of managers was published March 27, 2017. Money Management Executive is not affiliated with OPS. Ratings and awards may not be representative of any one client’s experience and are not indicative of OPS’s future performance.