Weekly Economic Update provided by Capstone Investment Financial Group
UNSETTLING NEWS
After the Dow Industrials and S&P 500 index climbed to new record highs to begin the week, stocks pulled back amid weaker-than-expected retail sales, festering concerns about the Delta variant, and slowing growth in
China.
The stock market retreat accelerated mid-week with the release of the FOMC (Federal Open Market Committee) meeting minutes, which signaled that Fed officials may be ready to begin reducing its monthly bond purchases
before the end of the year. Stocks managed to stabilize on Friday, paring some of the week’s losses. Consumer staples, health care, real estate, and utilities were the top-performing groups.4
TAPER BY YEAR END?
Two weeks ago, multiple regional Federal Reserve Bank presidents suggested that the economy was strong enough to justify tapering the Fed’s monthly bond purchases.
Last week, that chorus grew a bit louder with the release of minutes from July’s FOMC (Federal Open Market Committee) meeting. The precise timing was left undecided, with some officials believing it should begin before
year-end, while others thought waiting until the start of the new year was the better choice.5