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September 2021
Market Update
(all values as of 12.31.2023)

Stock Indices:

Dow Jones 37,689
S&P 500 4,769
Nasdaq 15,011

Bond Sector Yields:

2 Yr Treasury 4.23%
10 Yr Treasury 3.88%
10 Yr Municipal 2.27%
High Yield 7.39%

YTD Market Returns:

Dow Jones 13.70%
S&P 500 24.23%
Nasdaq 43.42%
MSCI-EAFE 15.03%
MSCI-Europe 16.68%
MSCI-Pacific 12.07%
MSCI-Emg Mkt 7.04%
US Agg Bond 5.53%
US Corp Bond 8.52%
US Gov’t Bond 5.72%

Commodity Prices:

Gold 2,071
Silver 24.02
Oil (WTI) 71.33


Dollar / Euro 1.10
Dollar / Pound 1.27
Yen / Dollar 140.98
Canadian /Dollar 0.75

Macro Overview

An increasing number of companies, schools and government agencies are imposing vaccine requirements for employees and students. The World Health Organization has identified 20 COVID-19 variants throughout the world, four of which it categorizes as variants of concern (VOC). Supply chain disruptions brought about by the pandemic have contributed to inflationary pressures not seen since the late 1970’s. Shortages of essential components and lack of qualified workers drove prices higher in nearly every industry nationwide.

Federal officials ordered water cuts across the enormous Colorado River system, the first time ever since the Colorado River Compact was drafted in the 1920s. Water from the river serves more than 40 million residents and farmers in Arizona, California, Nevada, Colorado, New Mexico, Utah and Wyoming. Under a treaty signed with Mexico in 1944, water from the Colorado River is also siphoned to farmers in Mexicali. An extensive drought with minimal rainfall for the past several seasons has led to dangerously low reservoir levels, devastated farms, and sparked treacherous forest fires.

Congress proposed a $3.5 trillion spending bill, focused on health, jobs, education, agriculture, and energy. The Senate Finance Committee expects to pay for the bill with taxes on the wealthy and corporations, outstanding uncollected taxes, and other measures. Some budget analysts anticipate that the additional increase in taxes proposed may not be enough to fund the spending bill.

The Federal Reserve announced that it doesn’t intend to raise interest rates yet, but plans on potentially buying fewer mortgage and Treasury bonds later this year, a move also known as tapering. The Fed’s purchase of bonds in the open market has been a form of stimulus support during the pandemic, helping to keep rates low and providing liquidity in financial markets.

Delayed deliveries of imports from Asia depressed inventory levels and product sales throughout the U.S. The twin ports of Los Angeles and Long Beach in California reported 44 container ships anchored off the coast at the end of August, exceeding the record of 40 from earlier this year. Labor shortages and coronavirus safety protocols mandated for container vessels and ports have created supply bottlenecks, preventing millions of imported products from reaching stores and consumers.

The U.S. Supreme Court voted to allow evictions for those not paying rent. Although the decision affects renters and landlords nationally, various cities and states have extended eviction moratoriums and will continue to enforce a ban on evictions. It is estimated that approximately 10 million people nationwide are behind on their rent payments.

Consumer sentiment fell in August due to uncertainty regarding the COVID-19 variants and inflationary pressures. The University of Michigan, which compiles and releases the Index of Consumer Sentiment each month, reported a 13.4% decrease in August from July, the largest monthly decline since 2005 following hurricane Katrina. (Sources:, Federal Reserve, WHO, Port of L.A.,, U.S. Department of the Interior)

consumers make up nearly 70% of GDP

Global Equities Steady In August – Equity Update

Global equity markets advanced in August amidst growing concerns about coronavirus variant threats. Continued supply issues of critical components for various products weighed on earnings estimates, as many companies struggled to rebuild inventory. Higher prices for some services and products are sustaining revenues and margins for various companies.

Major equity indices all posted higher gains in August, elevating valuations for both large and small companies. International markets also fared well for the month, as developed and emerging markets equity indices saw increases.

Sources: Bloomberg, Reuters

Bond Yields Feeling Pressure – Fixed Income Update

The Federal Reserve announced that it anticipates reducing bond purchases later this year, but with no imminent increase in the target interest rate. The Fed’s pullback in bond buying is known as tapering, which describes an unwinding of monetary stimulus support.

While not a direct intent of the Fed, any pullback in bond purchases is expected to lead to higher rates, an indirect consequence of tapering. Yields on Treasury bonds maturing from 2 to 30 years all saw slight increases, interpreted by economists as a shift up in the yield curve, meaning that economic expansion is possible and that inflationary pressures are expected.

Sources: Fed, U.S. Treasury

Consumers Drive Economic Growth – Consumer Expenditures

Each month the Department of Commerce releases its Gross Domestic Product (GDP) report. This report is generally recognized as the most significant indicator of how the economy is performing. GDP is made up of private consumption, gross investment, government spending, and net exports. The single largest contributor of these components is consumer consumption, comprising nearly 70% of GDP.

Historical data provided by the Bureau of Labor Statistics shows that U.S. economic growth has steadily become more reliant on consumer expenditures over time. Consumer expenditures as a percentage of GDP at at their highest levels since the end of World War II. The manner in which consumers make purchase decisions, therefore, plays an outsize role in the health of the economy.

Data from the Fed show that consumers have recently adjusted their spending behavior, relying less on credit and more on government stimulus payments to spend, notably different from the peak of easy credit seen in 2004-2006. (Sources: BLS, Fed)




A California proposition passed in 2018 may induce higher pork prices nationwide

Why Bacon Is Getting More Expensive – Food Inflation

Various factors have contributed to bacon’s higher costs over the past year, including rising feed costs, higher processing costs, increased demand, and newly-passed animal confinement laws.

As the pandemic shuttered businesses over the past year and kept workers home, processing plants that produce meat products, such as bacon, were unable to meet demand. Grains and other feed products concurrently increased in costs, adding upward pressure on meat prices.

A California proposition passed in 2018, known as the Farm Confinement Proposition, requires that pig farmers maintain more breeding space for animals. Producers are making arrangements for the additional real estate required to meet the new law, and are passing along those expenses to consumers. Pig farmers in states other than California are affected because pork products won’t be allowed for sale in California unless the new animal confinement rules are met.

Increasing labor costs are also a concern as meat producers that lost workers last year to the pandemic have not yet found replacements in many cases, with some increasing wages in order to attract new hires.

Sources: USDA, BLS, National Pork Producers Council

Millions Spend Nearly Half Of Income On Rent – Housing Update

Because home prices soared over the past year and housing inventories fell, many families were forced to rent rather than own. As a result, demand for rentals increased and home ownership decreased. Some real estate analysts attribute this dynamic to a low inventory of homes on the market, while others blame investment speculation that leads to rapidly rising home prices.

A lack of available houses, along with the increased demand for rentals, has propelled rental costs higher. The number of families allocating approximately half of their income to rent was nearly 10 million people in 2020, according to the annual State of the Nation’s Housing Report from the Joint Center for Housing Studies.

As rental prices have been rising faster than wages, contributing such a large portion of each paycheck to cover housing means many need to cut back spending on items including food, clothing and health care. This can be draining on young families trying to save for a down payment on a future home purchase, which may impact housing markets in the future.

Affluent renters are staying in the rental market longer and driving up the demand for housing. Historically, wealthy individuals and families move on to become homeowners, but tight housing inventory is keeping them in rentals longer.

The report found that most new apartment construction has focused on higher income earners. Those earning $75,000 and over contributed the most to rental growth over the past few years.

Sources: Joint Center For Housing Studies



there was over a 35% increase in SNAP benefit payments over the past year

SNAP Benefits Up Over 35% in Past Year – Government Subsidy Benefits Overview

The U.S. Department of Agriculture announced that the Supplemental Nutritional Assistance Program (SNAP), also known as food stamps, will increase benefit payments by 25% starting in October. The increase is the largest ever for the 42 million recipients nationwide. The average monthly increase will amount to roughly $36 in food benefit payments per person.

Data provided by the USDA showed that there was an increase of more than 35% in SNAP benefit payments over the past year, from May 2020 through May 2021. The increase in SNAP benefits coincide with the rise in food prices nationwide.

Food stamps were first introduced in 1939 as the Food Stamp Program (FSP), which issued orange and blue stamps used for approved food purchases nationwide. The Food Stamp Act of 1964 established a broad and highly-monitored system that is still in use, known today as SNAP.

Source: USDA

Digitized Covid-19 Vaccination Records – Focus Update

Even as the majority of adult Americans have opted to receive the COVID-19 vaccination, the little white card showing proof of vaccination does not suffice for entry to certain locations. Various schools, employers, and government entities now require a digitized record of a COVID-19 vaccination.

Some states already introduced apps that allow immunization records to be stored and displayed on mobile devices. For now, the CDC leaves it up to individual states to offer digitized immunization records. Not every state offers digitized records, although a digitized record of vaccinations may eventually become available on a national level.

Source: Centers For Disease Control & Prevention