Broker Check

Market Update (August 2021)

August 17, 2021
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Markets shrugged off COVID anxiety and mixed economic data to rally to new highs during the first half of August. The August 6 jobs report showed 943,000 jobs generated – the highest number in 11 months. Unemployment fell to 5.4% and hourly earnings grew by 4%.
 
Manufacturing in the U.S. and China showed signs of slowing. This could be a short-term problem caused by supply chain issues and the continued labor shortage. Or it could be an indication of slowing growth which would indicate larger problems are looming.
 
Coronavirus cases worldwide reached 206.84 million. Covid-19 deaths topped 4.35 million. Coronavirus cases in the U.S. have hit 37.32 million, with deaths above 637,000.
 
Traditionally August can be a challenging month and this year expectations were the same.  To say this has not materialized is an understatement; in fact, August is shaping up to be one of the calmest months on record. “A 5-to-10% pullback, we haven’t had that yet. That’s pretty extraordinary,” Alicia Levine, head of equities and capital markets advisory vice-chair of the investment committee at BNY Mellon Wealth Management, said on Bloomberg TV and Radio. That’s not to say it can’t happen, she said, “but the direction of travel is upward.”
   
As of August 12th, all the major markets posted gains for the first half of the month. The Dow Jones Industrial Average (Dow) gained 555 points (1.6%). The S&P 500 increased by 73 points (1.7%). The NASDAQ Composite Index (NASDAQ) rose by 151 points (1.0%). Once again, the Dow, S&P 500, and NASDAQ reached new all-time record closes over the past two weeks.