Equity markets rallied again last week, as investors applauded a host of positive news throughout the week. The much-awaited Federal Reserve meeting wrapped up and while they shared plans to gradually taper their bond buying program between now and mid-2022, Fed President Jerome Powell indicated they are in no hurry to begin raising rates. Markets reacted favorably to Powell’s patient messaging.
In addition, the US payroll report issued Friday surprised to the upside with 531,000 new jobs added last month, pushing the unemployment rate down to 4.6% (see graph below). That result easily bested economist estimates, which projected growth of 450,000 jobs. Not surprisingly, nearly all major equity index posted positive returns for the week based on the news. The S&P 500 (a proxy for large-cap US stocks) was up 2% for the week and the MSCI ACWI index (a proxy for global large-cap stocks) climbed 1.6%.
Lastly, there was positive news on the pandemic front, as well. Pharmaceutical company Pfizer released clinical trial results for their Covid pill, reporting a reduction in deaths and hospitalizations in high-risk patients by 89%. The company plans to file for emergency FDA approval soon, and, if approved, the treatment “would be another tool in our toolbox to protect people”, stated President Joe Biden.
Prices & Interest Rates
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Source: Morningstar, YCharts, and US Treasury as of November 6, 2021
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