Normalcy and New All Time Highs
Overview
Equity markets erased 4 weeks of declines and rallied last week to new all-time highs, against the on-going calls for -10% or more by some strategists. The S&P 500 was up +1.6%, Japan up +.9%, and Canada +1.4%. Industrials, healthcare, and financials led the rally, while technology, consumer discretionary, telco service, and utilities were negative on the week. Bitcoin surged to over $65,000, briefly reaching a new all-time high as well. We remind everyone – our view has consistently been that this is a very “normal” year, and that we remain positive on the markets as we enter the end of the year.
Interest Rates
10-year bond yields briefly hit 1.7% last week, up 40 basis points from a month ago but essentially flat now for the past 2, 5, and 10 years. (Yes, you read that correctly) Expectations for earlier rate increases by central banks are working their way into the system, but recall that equities have continued to rise, albeit at slower rates, even when the Fed has raised rates this cycle.
Earnings Season
Early in the 3rd quarter earnings reporting season, with close to 25% of S&P 500 companies reporting (115 companies), 81% have beaten earnings while 67% have outpaced revenue estimates. Firms like Proctor and Gamble and Chipotle are beating numbers and raising pricing, while others like Intel have missed largely expectations on supply component shortages. 164 companies report this week.
The Investment Team on YouTube
As we mentioned last week, we are now filming the weekly “Stock Talk” podcast and publishing on YouTube! The audio-only versions remain available as usual. We invite you to subscribe to the Oak Harvest YouTube channel to get those videos, as well as loads of videos related to timely subjects involving financial planning. Last week’s Stock Talk video, “Tops, Corrections, and Crashes: 4 Things that Lead,” can be found here:
https://www.youtube.com/watch?v=u1rc5FwNb8k
The Investment Team plans to potentially expand our video releases as well, so please let us know if there any particular topics you would like us to cover.
Stock Talk Podcast (Weekly Market News and Opinion from Oak Harvest):
https://oakharvestfg.com/stock-talk-podcast/
The Investor Mindset Podcast (Introduction to Critical Concepts for Investors):
https://oakharvestfg.com/investor-mindset/
Oak Harvest YouTube Channel
https://www.youtube.com/c/OakHarvestFinancialGroup/
Interesting Reading:
https://www.nytimes.com/2021/10/25/us/politics/russia-cybersurveillance-biden.html
https://www.cnn.com/2021/10/24/politics/janet-yellen-inflation-labor-market-cnntv/index.html
This content contains general information and express the views of Oak Harvest Investment Services. All data, articles, and information cited are believed to be reliable at the time of creation; however, Oak Harvest does not warrant any information contained herein to be correct, complete, accurate or timely.
Oak Harvest provides links to content produced by other websites that OHFG does not control, and Oak Harvest does not necessarily approve or endorse such content and does not guarantee its accuracy. Nothing in this content constitutes personalized investment advice. Any charts, indicators, or graphs included or referenced in this content have limitations, and no such material is able, in and of itself, to provide a buy or sell recommendation for any security. Strategies and ideas discussed may not be right for you, and views and opinions expressed may change without notice. Strategies and ideas discussed will not apply to all client accounts or portfolios.
Nothing in this content constitutes a recommendation, or an offer or solicitation to buy or sell securities. Oak Harvest makes no assurance as to the accuracy of any forecast or projection made. Not all past forecasts or projections have been accurate. No current or future forecasts and projections are guaranteed to be accurate. And future forecasts may not be as accurate as any forecasts discussed. Indexes like the S&P 500 are not available for direct investment and your results will differ. Past performance is not indicative of future results. Investing involves the risk of loss.
