November 2021 in Review

Daniel Zeigler, CFP, CMFC, Portfolio Manager

Hi everyone, this is Dan Zeigler, Portfolio Manager at Midland Wealth Management. Today I just wanted to provide a quick recap for the markets for the month of November.

Equity markets were having a great November, until the last several days in which we saw increased volatility to the downside. Leading to this volatility has been the recent news of the Omicron coronavirus variant that has put the world on edge. There remain many unknowns about this variant, but scientists are researching to determine its severity, transmissibility and whether it evades current vaccines. A growing number of countries have reported confirmed cases of the variant.

Given this uncertainty, the market has experienced several days of “risk-off” investing. Oil prices have dropped over $10 a barrel and the 10-year Treasury yields have dropped from 1.66% to 1.45%, as traders are most likely concerned that the global economic recovery could be delayed if severe restrictions are put back in place. Further, it is not clear if the current vaccines are as effective to battle the new variant.

Not helping the volatility was Federal Chairman Jerome Powell’s latest testimony to Congress, in which he alluded to thinking about speeding up the tapering of their bond purchases, which seemed to catch investors off guard as the Fed may be more concerned about inflation than previously thought.

The S&P 500 Index ended down for the month of about 0.75% but still remains positive of about 23% for the year. Small-cap stocks were more volatile for the month and they are down about 10% from their all-time highs and were down about 4.3% for the month, but still have a positive return [for the year] of about 12%.

Investors will be watching a key jobs number this Friday, as the consensus estimate is calling for the addition of about 580,000 jobs, with the unemployment rate dropping to roughly 4.5%.

The economy continues to be on a strong footing, however, the market does not like uncertainty which is what the new variant has caused. We will be closely monitoring everything as the year comes to an end and will be focusing on investment strategies for 2022.