Last week, the S&P 500 (SPY) started on a sour note but recovered and finished the week strong. This week has started to look the same. Due to concerns over the debt ceiling, COVID, and inflation, the market continues to be volatile. But that was expected, as I've mentioned in previous commentaries. We must keep in mind that the market has continued to show resilience and bounce back after a couple of bad days. I’ll discuss this and more below….(Please enjoy this updated version of my weekly commentary published September 29, 2021 from the POWR Value newsletter).
As I discussed in last week's commentary, the markets got off to a bad start last week, but fortunately, stocks were able to reverse course later in the week to finish with gains. Stocks got a boost from Fed Chair Jerome Powell, who confirmed the tapering of asset purchases would begin soon, but the Fed is still committed to ensuring the economy is on solid ground.
Gains were extended into Thursday due to the continued positive sentiment regarding the economy. Slight gains continued on Friday as stocks ended a volatile session on a high note. It appeared investors were looking past concerns in China and focusing on optimism in the economy. That optimism led to cyclical stock outperformance later in the week.