9/10/21 Market Update

Major US indices closed the week down, with the S&P 500 down roughly 1.74% from the start of the week. The market saw 4 back to back days of decline, the longest continuous decline since February. This decline is attributable to several factors, including inflation fears sparked by the 0.7% price increase in August from the previous month and 8.3% y/y inflation increase. On top of this, US job hires in August came in unexpectedly low, with the economy only adding 235,000 jobs instead of the expected 720,000. The disappointing jobs numbers are largely attributable to the continuing Delta wave of the Covid-19 pandemic. However, President Biden has now announced that employers with over 100 employees must require employees to be vaccinated or get weekly covid tests. This sweeping mandate should significantly increase the number of vaccinated Americans, and in turn lower Covid numbers headed into the winter. Looking at the week ahead, it seems that inflation, Delta and politics around the looming US government debt ceiling are being hit, which could force a government shutdown. Pay attention to politics, Covid news and University of Michigan’s consumer sentiment report for direction of the market.