News & Insights

Weekly Investment Update October 18, 2021

Written by OneAscent | Oct 18, 2021 8:47:00 PM

Equity markets surged higher last week as earnings season got off to a great start. Several large banks reported strong earnings, which helped push equity markets higher. Goldman Sachs reported that their year-to-date revenue in 2021 is already the highest annual revenue recorded in firm history, and there is still a quarter of the year left[1]. The S&P 500 (a proxy for large-cap US stocks) was up 1.8% for the week and the MSCI ACWI index (a proxy for global large-cap stocks) jumped 2.2%[2].

An important footnote to the strong bank earnings reports last week was the broad agreement by bank leadership that inflation, and wage inflation in particular, remains a concern. Goldman Sachs CEO David Solomon commented, “there’s real wage inflation across all aspects of the economy right now"[3].

As one can see below, the US Consumer Price Index, a commonly used gauge of inflation, has risen to levels not seen in more than a decade. The Federal Reserve’s stance that inflation will be short-lived is being called into question more often recently, especially in areas like wage inflation.



Prices & Interest Rates

Representative Index Current Year-End 2020
Crude Oil (US WTI) $82.00 $48.52
Gold $1,767 $1,893
US Dollar 93.95 89.94
2 Year Treasury 0.41% 0.13%
10 Year Treasury 1.59% 0.93%
30 Year Treasury 2.05% 1.65%
Source: Morningstar, YCharts, and US Treasury as of October 16, 2021

 

Asset Class Returns

Category Representative Index YTD 2021 Full Year 2020
Global Equity MSCI All-Country World 14.8% 16.3%
Global Equity MSCI All-Country World ESG Leaders 16.4% 16.0%
US Large Cap Equity  S&P 500  20.4% 18.4%
US Large Cap Equity  Dow Jones Industrial Average 17.0% 9.7%
US Small Cap Equity  Russell 2000 15.6% 20.0%
Foreign Developed Equity MSCI EAFE 10.4% 7.8%
Emerging Market Equity MSCI Emerging Markets 1.2% 18.3%
US Fixed Income Bloomberg Barclays Municipal Bond 0.7% 5.2%
US Fixed Income Bloomberg Barclays US Agg Bond -1.7% 7.5%
Global Fixed Income Bloomberg Barclays Global Agg. Bond -4.2% 9.2%
Source: YCharts as of October 16, 2021

 

[1] Source: Goldman Traders Deliver Surprise Surge in Firm’s Best Year - Bloomberg
[2] Source: YCharts
[3] Source: Wage Inflation Is Spreading Through the Economy, Goldman Sachs CEO Says - Bloomberg

 

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Past performance may not be representative of future results.  All investments are subject to loss.  Forecasts regarding the market or economy are subject to a wide range of possible outcomes.  The views presented in this market update may prove to be inaccurate for a variety of factors.  These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data.  Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.