November market review
Positive fundamentals and supportive seasonality propelled the equity markets to record highs during the month. However, COVID-driven volatility increased after the holiday and the S&P 500 Index lost roughly 1% in November – making it the second negative month of the year.
The virus will continue to mutate, but the transmissibility, severity and evasiveness of omicron and any other new variants against our current toolbox of vaccines and therapeutics remains uncertain. As such, Raymond James Chief Investment Officer Larry Adam cautioned against making changes to portfolio allocations based on headlines, with so many economic factors to consider.
A few highlights:
- Economic activity picked up noticeably in recent months.
- Consumer demand for goods is above pre-pandemic levels, joining supply chain challenges in contributing to inflation.
- The Federal Reserve has begun to taper its asset purchases, though some officials want to taper faster and the financial markets are pricing in an earlier-than-indicated hike in short-term interest rates.
- The bipartisan infrastructure law and reappointment of Federal Reserve Chairman Jerome Powell were market positive events.
- The outlook for economic growth remains positive, though the emergence of a new COVID-19 variant bears watching.
If you have any questions about your investments, your financial plan, this letter – or anything else – please reach out at your earliest convenience. We remain grateful for our relationship and your continued trust in us.
Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of the Raymond James Chief Investment Office and are subject to change. There is no assurance the trends mentioned will continue or that the forecasts discussed will be realized. Past performance may not be indicative of future results. Economic and market conditions are subject to change. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 is an unmanaged index of small cap securities. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. An investment cannot be made in these indexes. The performance mentioned does not include fees and charges which would reduce an investor’s returns. Small cap securities generally involve greater risks. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks. These risks may be greater in emerging markets. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.
Material prepared by Raymond James for use by its advisors.