The stock market powered to record levels last week amid talk of Fed tapering and a deceleration in new Delta variant cases.
The Dow Jones Industrial Average gained 0.96%, while the Standard & Poor’s 500 increased 1.52%. The Nasdaq Composite index led, picking up 2.82%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.39%.1,2,3
Stocks surged to begin the week as investor sentiment improved on news of the FDA’s approval of its first COVID-19 vaccine, a strong housing number and comments by the Federal Reserve Bank-Dallas president that he would support delaying tapering if the Delta variant spread worsened.
Stocks continued their climb through midweek, pushing the S&P 500 to another record high and the NASDAQ Composite above 15,000 for the first time. The S&P 500 and NASDAQ Composite closed the week at record highs following Fed Chair Powell’s comments that Fed is likely to begin winding down its monthly bond purchases (aka tapering) by year-end, though no interest rate hikes were imminent.4
At last week’s Jackson Hole Economic Policy Symposium, Fed Chair Jerome Powell’s speech on Friday provided further insights into Fed plans to begin tapering. Powell said that the Fed may likely commence tapering prior to year-end, adding that the wind down of bond purchases should not be seen as a signal for future rate hikes. Powell emphasized that labor market conditions remain short of the Fed’s target for maximizing employment. He also reiterated his case for why inflation remains a transitory phenomenon.4
With a number of Regional Federal Reserve Bank presidents already supportive of tapering, investors may see more definitive steps coming out of next month’s FOMC (Federal Open Market Committee) meeting.
This Week: Key Economic Data
Tuesday: Consumer Confidence.
Wednesday: ISM (Institute for Supply Management) Manufacturing Index. ADP (Automated Data Processing) Employment Report.
Thursday: Jobless Claims. Factory Orders.
Friday: Employment Situation Report. ISM (Institute for Supply Management) Services Index.
Source: Econoday, August 27, 2021
This Week: Companies Reporting Earnings
Monday: Zoom Video Communications, Inc. (ZM).
Tuesday: Netease, Inc. (NTES), Crowdstrike Holdings (CRWD).
Wednesday: Okta, Inc. (OKTA).
Thursday: Broadcom, Inc. (AVGO), Mongodb, Inc. (MDB), Docusign, Inc. (DOCU).
Source: Zacks, August 27, 2021
Is it Time for a Paycheck Checkup?
There's no better time to check your withholding status and make sure your paycheck accurately reflects the taxes you should be paying. These paycheck checkups are a great practice when something happens in your life that may change your tax status, such as getting married or getting divorced, having a baby, getting a new job, or getting a raise or promotion at work. You can also adjust your withholding status if you just want to change how much tax is withheld due to other circumstances.
During your paycheck checkup, you can also check other factors such as how much you're contributing to your health insurance or 401(k). These expenses can also impact your tax liability.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov5
5-Minute Core-Strengthening Workout
Even if you don't have a ton of time to dedicate to a core workout, this circuit will get you going and only takes 5 minutes. Here are the moves:
Tip adapted from Mind Body Green Movement6
“What you do makes a difference, and you have to decide what kind of difference you want to make.”
– Jane Goodall
Footnotes and Sources
2. The Wall Street Journal, August 27, 2021
3. The Wall Street Journal, August 27, 2021
4. CNBC, August 27, 2021
5. IRS.gov, September 19, 2020
6. Mindbodygreen.com, November 2, 2019
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Weekly Market Insights: Powell: Tapering Likely in 2021
August 30, 2021