Podcast and Market Recap

We post a short market recap podcast each Monday, and an in-depth written market recap each quarter.

Weekly Market Recap – November 22, 2021

The Markets (as of market close November 19, 2021)

Stocks closed last week mixed, with the Nasdaq and the S&P 500 posting gains, while the Russell 2000, the Global Dow, and the Dow fell. Another round of strong corporate earnings data was enough to overcome investor concerns that rising inflation might accelerate the withdrawal of economic stimulus, while a resurgence of COVID-19 cases in Europe could lead to more lockdowns, stalling economic recovery. Ten-year Treasury yields ended the week where they began.

Stocks closed marginally lower to begin the week last Monday. The Russell 2000 dipped 0.5%, while the remaining major benchmark indexes fell by less than 0.1%. Ten-year Treasury yields increased to close at 1.62%. The dollar and crude oil prices advanced slightly. The market sectors were also mixed, with energy and utilities showing strength, while information technology, health care, and materials lagged.

Last Tuesday, equities rose following strong economic data. The majority of the benchmark indexes posted solid gains after strong retail sales figures, a solid industrial production report, and favorable corporate earnings results. Only the Global Dow dipped lower, while the Nasdaq (0.8%), the S&P 500 (0.4%), the Russell 2000 (0.2%), and the Dow (0.2%) gained.

Last Tuesday’s momentum for stocks didn’t carry over to Wednesday, as each of the benchmark indexes ended the day in the red. The Russell 2000 led the decline, falling 1.2%, followed by the Dow (-0.6%), the Nasdaq (-0.3%), the S&P 500 (-0.3%), and the Global Dow (-0.3%). Along with rising inflation, housing starts slowed in October as builders wrestled with rising material prices and labor shortages.

Wall Street was driven lower last Friday as economically sensitive market sectors, such as energy, financials, and health care, fell. Among the benchmark indexes, only the Nasdaq was able to post a gain. The Russell 2000 and the Global Dow dipped 0.9%, while the Dow dropped 0.8%. The S&P 500 inched slightly lower by the close of trading. Ten-year Treasury yields and crude oil prices decreased, while the dollar advanced.

Eye on the Week Ahead

Thanksgiving week is filled with important economic reports, led by the second estimate of the third-quarter GDP. The initial estimate showed the economy expanded at a rate of 2.0%, well off the pace of 6.7% set in the second quarter. The report on personal income and outlays for October is also out this week. Although personal income fell 0.1% in September, consumer spending increased 0.6%, and consumer prices rose 0.3%. Finally, the housing sector is front and center with the latest data on sales of new and existing homes. Sales of both new and existing homes soared in September, increasing 14.0% and 7.0%, respectively.

Quarterly Market Recap

Dear Azzad Funds Shareholder,

The third quarter was a roller-coaster ride for the equity market, with the benchmark S&P 500 ultimately able to eke out a small quarterly gain. Treasury yields, the dollar, and crude oil prices each ended the quarter higher. Financials, information technology, communication services, and health care finished in the black. Energy, industrials, and materials fell by at least 4.5%. Despite the downturns, benchmark indexes remain well ahead of their 2020 closing values.

Following a strong July and August, September saw the market struggle with volatility. This was due in part to supply-chain disruptions, debt ceiling brinkmanship in Washington, and China’s regulatory restrictions. In addition, investors are facing the prospect of the Federal Reserve beginning to wind down its stimulus measures.

Chinese property developer Evergrande rocked both equity and fixed income markets during the period, resulting in as much as a -6.1% return for Asian fixed income. Sukuk markets, however, proved more resilient.

Uncertainty over the full extent of Evergrande’s debt load, beyond its more than $300 billion reported in liabilities, has plagued investors who worry about a liquidity crisis and economic contagion. Authorities ranging from Federal Reserve officials to Hong Kong’s central bank are looking into just how exposed global financial institutions are to the crisis.

Prudent long-term investors should stay the course to take advantage of the market’s tendency to go up over time. Stick to your plan, confident that patience is a virtue.

Thank you for your continued trust and investment.