Here’s the weekly rundown – August 23 – 27, 2021
Weekly Summary:
Vaccines for everyone! Not a fan? Well, a good consolation prize might be that your 401K continues to go up this week as the S&P 500 set new record highs on each day except one.
Need an explanation…This week’s market comes down to three things, The Pfizer vaccine, Company mandates, and The Feds easy money with main emphasis on the Fed.
We got a whole lot closer to what you could consider as a notional vaccination mandate this week when the FDA approved Pfizer’s COVID19 vaccination. The real question though is who came up with the vaccine’s name “Comirnaty” as it is objectively bad.
Regardless, there are effectively two implications of the vaccine with a bad name. The first being it is now possible for local governments to require vaccination for things since the Pfizer vaccine is no longer “emergency use”. The second is a fully approved vaccine emboldens employers to require their employees to be vaccinated –see Delta $200 for no vac i.e. vaccines are likely coming for everyone.
While the approval came as no surprise this is still seen as an encouraging “end in sight” to the COVID 19 story. So, plus for the market.
The bigger story/question of the week was what would Fed Chair Powell say today at Jackson Hole regarding slowing the Fed’s stimulus of the economy and interest rates?
Side note:
Currently, the Fed is purchasing $120 billion each month of assets such as government bonds (what our gov. spends) and mortgage-backed securities (think many 30-year home loans). What this does is keep demand for these assets high, so interest doesn’t creep up to match supply to demand. In other words, this helps the gov. spend and people can borrow money for houses cheaply. Basically, cheap money helps the economy because people spend it.
Lucky for the bull market, Powell agreed to reduce spending but likely not as soon as many investors thought. With respect to raising interest rates, that’s not going to happen any time soon.
Conclusion, good news is flowing and it’s off to the races for another week.
What’s up with China – China Bans US IPOs
Distrust abounds in the relationship between the US and China but that’s not really new. This escalation coming from china’s securities agency may in part be a response to the US Securities and Exchange Commission’s increased scrutiny of Chinese companies which haven’t always played in the best interest of American investors.
With more and more news of China’s government getting involved in Chinese companies, the best conclusion for American investors is to steer clear of these companies.
The Major Headlines:
? Electric Pickup Trucks…Are coming and popular
The most popular pickup truck in the US, the F-150, is going electric in 2022. Well, sort of, Ford announced plans to produce about 40,000 of the F-150 Lightnings for 2022 back in May but demand for them has been so strong that Ford doubled its production plans this week to 80,000.
? Better Pay Your Landlord
Turns out the CDC can’t make ridiculous rulings that don’t have to do with health, who would have thought?? The US Supreme Court ruled on August 26th that the CDC does not have the authority to place a moratorium on evictions that force landlords to bear the pandemic’s cost.
The court said that the moratorium had placed many landlords at risk of irreparable harm by depriving them of rental payments with no guarantee of recovery.
What’s most said is only about 11% of the $47 billion Congress allocated for rental assistance has been used.