The S&P 500 finished November down -3.27%, while the Nasdaq Composite finished similarly -3.53% and the Dow dropped -5.91%. The month was volatile and the markets softened due to concerns about inflation. In the final few days of the month concern about the impacts of omicron weighed on markets.
Fed Chair Jerome Powell signaled inflation may be more of a concern than previously expressed stating that the tapering, the Fed slowing or quitting their policy of buying bonds to provide liquidity in the bond markets, may be sooner than anticipated. He also stated they will either drop or redefine wha the word ‘transitory’ means regarding their prior statements regarding inflation. With potential changes in policy on the horizon, market participants should expect additional market volatility.
We believe the underlying fundamentals of the economy and an upcoming robust vaccine response to the new threats will be sufficient to overcome short term worries. Our biggest concern is aligned with Powell in that he is finally admitting that inflation isn’t going away as fast as anyone would like.
Other news that created softness in the market was that the U.S. consumer confidence dropped to a nine-month low in November amid worries about the rising cost of living and pandemic fatigue, but that did not change expectations for stronger economic growth this quarter. A survey of the S&P 500 CEOs, going into Thanksgiving week, indicates expectations of a strong and robust economy as we head into 2022. What proved to be the biggest concern expressed in the survey was that while the multi-decade low jobless claims is good for the economy, there is a persistent shortage of workers which presents the most immediate challenge.
Fun Facts for December: Back in Roman times, the calendar only had ten months and began with March! The winter period was not even assigned months because it was not an active time for military, agriculture, or civil life. December was originally the 10th month of the Roman calendar (until 153 BC). Hence, “December” comes from the Latin word decem, meaning “ten.”
Frost on the shortest day is said to indicate a severe winter. This year, the shortest day falls on Tuesday December 21st.
The first recorded incidence of Christmas being celebrated dates all the way back to the Roman Empire in 336, during the time of the Roman Emperor Constantine – so technically the Romans invented it, although there’s no specific person who is credited with having done so.
The Roman Christian historian Sextus Julius Africanus dated Jesus’ conception to March 25 (the same date upon which he held that the world was created), which, after nine months in his mother’s womb, would result in a December 25 birth.