Stocks gained today but were down last week, even after the S&P 500 (SPY) hit a new record high of 4,480 last Monday afternoon. For comparison's sake, that is more than double its intraday low of 2,192 on March 23, 2020. Small-cap stocks were major laggards of the week, with the Russell 2000 Index hitting correction territory. The index was briefly down more than 10% from its March 2021 peak. The energy sector was the worst performer, while health care stocks saw gains. Also of note, trading volumes were at the highest level in a month as retail investors got back into the mix. I’ll discuss this and more below….(Please enjoy this updated version of my weekly commentary published August 23, 2021 from the POWR Value newsletter).
While the market finished Friday on a positive note, several factors led to a lower week. First, there were continued signs of an economic slowdown in China. China's regulatory crackdown on its most prominent tech companies pushed Asian stocks lower for the week.
In an effort to remind China's tech entrepreneurs not to get too big for their bridges, the country appears to be doing itself a disservice. Stocks in China are down more than 20% for the year. Even SEC Commission Chair Gary Gensler urged caution when investing in Chinese stocks due to the regulatory uncertainty.