US market weekly: S&P 500 ends lower amid higher inflation and mixed macroeconomic signals

US market weekly: S&P 500 ends lower amid higher inflation and mixed macroeconomic signals

Last updated: 14 Nov, 2021 | 07:46 am

US market weekly: S&P 500 ends lower amid higher inflation and mixed macroeconomic signals

US equity indices closed in record highs on Monday as investors picked up materials, energy and technology shares after Congress approved a more than $1 trillion infrastructure bill.

On Tuesday, the S&P 500 Index registered its first decline in nine sessions, ending its longest winning streak since 2017. Consumer discretionary shares led the declines in the S&P 500 following a steep fall in Tesla, after CEO Elon Musk announced plans to sell some of his shares.

US stocks further shrank on Wednesday, retreating from this week's record highs as Consumer prices soared to 6.2% in the month of Oct, being the fastest annual rise in consumer inflation since 1990

US indices were mixed on Thursday, with investors grappling with the implications of inflation that has soared to its highest in decades, and third-quarter earnings that are starting to show signs of slowing growth.

US Stocks advanced on Friday after a mixed session in the markets, with both earnings and inflation data remaining at the center of investor attention. For the week, S&P 500 ended -0.3% lower and Dow Jones -0.6% lower. 

Weekly market stats with IND

Let’s see the major developments during the week:

Inflation data highest in decades: For Oct 21 the Consumer price index reading came in at 6.2%, the highest level since 1990, while the Producer Price Index reading was 8.6%, the highest on record since 2010. The combination of strong demand and soft supply, caused by supply-chain bottlenecks, slow global reopening and labor shortages, and commodity-price inflation, have pushed inflation to decades high. However, the Fed believes that this inflation hike is temporary and will subside in the near future.

Macroeconomics signals: Weekly jobless claims hit a new pandemic-era low of 2,67,000, and the Labor Department reported that there were 10.4 million job openings in September, a slight decline from August’s record but above expectations. The House of Representatives approved the $1 trillion infrastructure package late on Friday. The bill will provide new rounds of funding worth $550 billion for transportation, utilities and 5G, among other infrastructure projects.

Delta variant remains a concern: The spread of the delta variant appears to have again picked up though economic progress is coming back on track.  An average of roughly over 1 lakh coronavirus cases have been reported each day in the United States while the total cases have crossed the 46.5 million mark. However, to battle this, the pace of vaccination has also picked up. About 59% of the eligible American population (age 12 and over) are fully vaccinated and over 68.5% have received the first dose.

Oil prices drop: Both Brent and WTI benchmarks fell for a third consecutive week, hit by a strengthening dollar and speculation that President Joe Biden's administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices. On a weekly basis, Brent fell 0.7%, while WTI declined 0.6%.