Weekly Market Insights: COVID-19 Variant Clobbers Markets

Brittney Stevenson

November 29, 2021

News of a new, highly virulent COVID variant triggered a market sell-off on Friday, sending stocks into negative territory for the week.

The Dow Jones Industrial Average slid 1.97%, while the Standard & Poor’s 500 slumped 2.20%. The Nasdaq Composite index lost 3.52% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 1.68%.^1,2,3

Red Friday

Investors woke up on Black Friday to reports of a mutated COVID variant, reviving fears of potential new economic restrictions. U.S. markets were not alone, as stock prices in Europe and Asia also tumbled.

Friday’s market action saw declines in economic reopening stocks, such as travel and leisure, cyclicals, financials, and energy, while some of the so-called stay-at-home stocks and pharmaceutical stocks experienced gains. Yields retreated amid a flight to safety and the potential that this turn of events may lead to a slowdown in the Fed’s bond tapering program and a delay in contemplated rate hikes. Prior to Thanksgiving the markets had been choppy, but largely trending higher for the week, while yields had moved up with the renomination of Fed Chair Powell.

Powell Renominated

President Biden announced last week that he was renominating Jerome Powell to serve another term as chairman of the Federal Reserve Bank, ending market speculation surrounding his renomination.

President Biden cited the need for stability and independence in a time of uncertainty in making his decision. While Powell’s renomination faced resistance, Senate approval appears likely. Coincident with Powell’s renomination, President Biden also nominated Lael Brainard, a member of the Federal Reserve Board of Governors, to serve as vice chair. Investors can soon expect further Fed nominations by the Biden Administration to fill vacancies created by term expirations and retirements.

This Week: Key Economic Data

Tuesday: Consumer Confidence.

Wednesday: ADP (Automated Data Processing) Employment Report. ISM (Institute for Supply Management) Manufacturing Index.

Thursday: Jobless Claims.

Friday: Employment Situation. Factory Orders.

^{Source: Econoday, November 26, 2021
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Tuesday: Salesforce.com, Inc. (CRM), Hewlett Packard Enterprise Company (HPE).

Wednesday: Okta, Inc. (OKTA), Snowflake, Inc. (SNOW), CrowdStrike (CRWD).

Thursday: Marvell Technology, Inc. (MRVL), Dollar General (DG), The Kroger Co. (KR), DocuSign (DOCU).

^{Source: Zacks, November 26, 2021
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“You can’t judge right from looking at what’s wrong.”

– Bo Diddley

Protect Your Financial Safety in Case of a Natural Disaster

No matter where you live, you should be aware of possible natural disasters in your area and plan accordingly by considering the following tax tips:

Update your emergency plan.
Create electronic copies of all important documents.
Document your valuables. Documenting these items ahead of time makes it easier to claim insurance and tax benefits if a disaster strikes.
You can call the IRS at 866-562-5227 with any natural disaster-related questions. The agency can provide copies of previous tax returns, order transcripts showing most line items, and more.
Net personal, casualty, and theft losses may be deductible if they’re attributable to a federally declared disaster.

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁴

The Scale Isn’t Everything: More-Comprehensive Ways to Measure Your Health

Put the scale away for a little while and try these techniques to focus on your overall health, rather than just a number:

Keep a journal and track your healthy habits, such as working out or eating veggies with every meal. Celebrate these small victories!
Take progress photos and compare them throughout your journey. Take your photos in the same pose, wearing the same outfit, at the same time every week (preferably in the morning before you’ve had breakfast).
Check in on other parts of your health, such as your energy levels, skin, tummy health, and more. Developing a healthy routine does so much more for your body than just lower the number on the scale.

These are just a few of the ways you can check in with yourself on your fitness and wellness journey without the scale.

Tip adapted from Daily Burn⁵

What nation has current and former capital cities whose names are anagrams of each other in the English language? (Hint: It is a major player in the global economy.)

Last week’s riddle: The Cage family has a mother, father, and six sons, and each son has one sister. So, how many people are in this family? Answer: Nine. A mother, father, six brothers, and one sister, as each brother has but one sister.

Village of Oia on the Greek island of Santorini at sunset.

Footnotes and Sources

^{1. The Wall Street Journal, November 26, 2021}

^{2. The Wall Street Journal, November 26, 2021}

^{3. The Wall Street Journal, November 26, 2021}

^{4. IRS.gov, January 22, 2021}

^{5. Daily Burn, June 24, 2021}