Monday Morning Market Insights: Last Week in Review with Rusty Vanneman, Vol. 46

  • Happy Monday! I hope you recovered nicely from your Thanksgiving feast.   Also, I hope you had luck with the Black Friday sales, including the one we witnessed in risk assets last Friday where the stock market had its worst day in weeks, if not months, and some benchmarks (like the Dow Jones Industrials) and markets (such as oil) had their worst day of the year.
  • Each of the major indices was down over 2% Friday, given the reports of a new COVID variant in South Africa.  This is likely to be the key driver of price action heading into this week.
  • Oil posted its worst day of the year on Friday, tumbling to the lowest level in more than two months as the new Covid strain stoked fears of new growth slowdowns coupled with the new supply increases.   Oil is bouncing nicely higher Monday morning though.
  • It was an interesting week of returns last week.  What happened on Friday was a reversal of the performance from earlier in the week. In the end, the stock market was down, ultimately led lower by small caps and growth names. Commodities, despite the hit on Friday, finished higher.
  • For the month, the overall US stock market is down less than 1% coming into Monday.   Given the expected rebound early this week, I would personally take the over on the market having another positive return for November.  
  • This month, the overall stock market did take the YTD lead in performance versus the “average” stock in the market: 22% vs 20%.  I’ll admit, I’m surprised. Given their respective valuations, and the economic fact we’ve seen the best economic growth and corporate earnings numbers in decades, it would seem that the “average” stock would be lapping the overall market. This is yet another reason to remain diversified!
  • In economic news last week, one of the Fed’s key inflation indicators, Core Personal Consumption, is up 4.1% year-over-year. This is the highest reading since 1991. Along with this reading, traders are now pricing in three 25 basis point rate hikes in 2022.
  • It was a roller-coaster week for Ten Year Treasury Yields. After sharply moving higher to 1.69% during last week, Friday’s price action saw yields drop back below 1.50%.   They are opening the week sharply higher again at 1.56%.
  • Welcome to yet another bear market in many digital assets. Bitcoin prices moved lower last week to its lowest levels since early October. It opens the week higher at $57k. Ethereum also slipped last week, but it’s not quite at bear market status yet. It is now at over $4300 again.  
  • Here’s another number that might tumble in the weeks ahead. It’s the estimate for 4Q GDP growth.  According to GDPNow on 11/24, US GDP is tracking an 8.6% increase.   
  • We will see what happens in this week’s economic schedule with the highlight being Friday’s payroll numbers.   November’s report currently has a consensus of 563,000 jobs added, and for the unemployment rate to decrease to 4.5%.  There were 531,000 jobs added in October, and the unemployment rate was at 4.6%.  We also have key manufacturing data this coming week.   All of this, of course, will likely be overshadowed by COVID developments.
  • Speaking of economic data, one goal of these bullets is to provide some good talking points. How about these 16 bullets?  – they’re mostly good ones for remaining a bull on the stock market.
  • Want investors to save more? One way is to have them get regular physical check-ups.   Hat tip to Klement on Investing for this nugget from his recent article called “Healthy, Wealthy and Wise”.
  • From Twitter last week here is a visual summary regarding Sahil Bloom’s “Paradoxes of Life”.  It’s a short take on 20+ powerful paradoxes on growth, business, investing, and life.”  Kind of Buffett/Munger-like.
  • We had a last moment postponement for our podcast guest a few weeks ago, so to keep the trains on schedule, Robyn Murray, Ben Vaske, and I talked about a bunch of stuff on this week’s Orion’s The Weighing Machine podcast.  In turn, we simply asked ourselves some of the questions we ask our guests.   Check out the Show Notes. They’re loaded.   BTW, last week’s interview with Dirk Hofschire got some great feedback.  Thanks for listening.
  • It’s getting cold and snow is in the air in some parts. How about this awesome picture of the week that came from an older Fast Company article of award-winning outdoor pictures.

  • One more thanksgiving link, since giving thanks is a year-round thing instead of just once a year.  It’s a summary of what 270 studies teach about gratitude, including gratitude as a two-step process: 1) “recognizing that one has obtained a positive outcome” and 2) “recognizing that there is an external source for this positive outcome.
  • Thanks for reading and have a great week!  For more resources, please check out the Financial Advisor Success Hub, and as always, please let us know what we can do better at rusty@orion.com or ben.vaske@orion.com.

3002-OPS-11/29/2021

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 www.cfainstitute.org.

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 https://cmtassociation.org/.

 

About Rusty Vanneman
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 podcast and authored the book “Higher Calling: A Guide to Helping Investors Achieve Their Goals.” Rusty has also 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 in 2017. 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).