June 10 Weekly Market Update

It has been yet another quiet week for stocks as has been the case for much of June. There is an old adage that states “sell in May and go away.” The thinking is that as more individuals go on vacation during the summer months, trading volumes fall, and the stock market subsequently treads water. With many vaccinated Americans dying to get out of their houses, we may very much be seeing early signs of this famed adage coming to life.

There were a couple notable economic releases this week, the first of which was the Labor Department’s monthly Job Openings and Labor Turnover Survey (JOLTS). One of the more positive data points in the April JOLTS report was that layoffs hit an all-time low. The rest of the report, however, was mixed. The number of job openings also hit a record high, surging nearly one million to reach a level of 9.3 million. While this is a good sign in that the demand for labor continues to rise, service-oriented businesses from restaurants to hotels are still struggling to fill positions as many Americans remain home due to both lingering COVID-19 fears and generous unemployment benefits.

Second, looking on a more global basis, the World Bank raised its forecast for 2021 global economic growth to 5.6% this week. If that were to come to fruition, it would be the strongest post-recession recovery since the early 1940s. That said, the recovery has very much been uneven or unequal as it were. Much of the recovery has been led by the U.S. and China. The U.S. has experienced a swift recovery due to the rapid deployment of vaccines and fiscal stimulus. China, a significant exporter of goods, is benefiting from a snapback in global demand and containment of the virus. Other nations are not recovering as quickly due to more sparse delivery of COVID-19 vaccines.

As the U.S. continues to lead the global recovery, far and away the best performing sectors of the U.S stock market in 2021 have been those whose fortunes are tied to strong economic growth – namely energy, financials, and industrials. Conversely, more defensive sectors like consumer staples and utilities have languished, with growth sectors like technology and health care sitting somewhere in between. While the recovery in these cyclical or value sectors has been very strong, I would not recommend abandoning growth-oriented areas of the market that have lagged. Having a balanced mix of growth and value stocks puts you in a position to benefit when either rally while helping to manage risk along the way.

Be safe and be well.

Market comments are based on various indexes which are unmanaged and cannot be directly invested into. Past performance is no guarantee of future results. Investing involves risk and the potential to lose principal.

The information provided is for general informational and educational purposes only and is not a recommendation of any kind or investment advice.

Diversification can help manage risk within your portfolio, but it does not guarantee profits or protect against loss in declining markets.

Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time and cannot be guaranteed.