September 2021
Market Update

Someone told me yesterday that there are only 116 days left until it is 2022.  Actually, what I heard was 109 shopping days until Christmas, but tomato to-mah-to …

It is usually the time of year when everyone is happy to see a change in the weather, signaling the change in the seasons and all that brings.  While here in Arizona we welcomed a record monsoon season – the same could not be said for the bulk of the country east of the Mississippi. 

Last week, Hurricane Ida continued her path of destruction into Pennsylvania, New Jersey and New York with the latter declaring a Flash Flood Emergency for New York City – for the first time ever.  If anything, it appears that Ida hit the tri-state area harder than the Gulf states where it first made land!

Last year, 2020 might have been one for the record books due to the pandemic and everyone was happy to have seen that year in the rear view mirror, but this year the natural disasters just keep coming.  Blame global warming, blame careless management of natural resources, maybe declare something more biblical, 2021 will have set a number of records and we probably won’t miss this year either!  If there was such a thing as “a good year to have a disaster”, well, this definitely isn’t it.

The current estimated cost of natural disasters through June of this year - floods, fire, tornadoes - had exceeded $8 billion, $1billion more than the annual average over the past decade.  Then came Ida, whom the National Weather Service is retiring as a named hurricane due to the severe nature of this storm (as they did with Katrina back in 2011).  Hurricane Ida’s damage estimates currently exceed $18 Billion.  These numbers do not include the current Caldor Fire in California, where over 191,000 acres have burned, although happily it appears finally under control after this weekend. The cost of that fire will be forthcoming and just add to what is turning into a record year for natural disasters.

We already have a housing shortage that is extended due to supply chain distruptions.  We have heard of shortages on everything from bathtubs, to bricks, to microprocessor chips (which affects so many industries) to paint …. Now we will have to find a way to replace many of these items lost to fire or flooding.  Scarcity of product and increasing demand lead inevitably to higher prices, which is painful whether or not it’s transitory!

All of these elements will impact our economy in a variety of ways.  Lack of inventory and the now increased demand for these scarce items, plus higher labor costs, will weigh on corporate profitability.  But increasing personal income and the continued increase in demand for these items could slow but now extend the economic recovery.  It will be an interesting study in which force wins out relative to the stock market, but at the moment nothing appears to be shaking its upward grind, including statements from the Federal Reserve that they will likely start to take their foot off the gas pedal starting this year and decrease their purchases of bonds. 

Volatility is what we expect while these financial winds blow in different directions and the economy sorts itself out.  In spite of this, we closed out August with another positive month in the markets with growth and technology leading the way.  The NASDAQ gained 4.22%, with the S&P adding 2.98%.  International markets continue to lag but also added gains with a 2.19% gain for emerging markets and 1.45% for developed markets (Europe et al).  In your portfolios here, we remain fully invested and watchful.

We had promised additional information about our Utah client appreciation event and an email with be out on later today with the details, but mark your calendars now for the Real Salt Lake bbq and soccer match the evening of Wednesday, September 29th!  We look forward to gathering with many of you for the first time in quite a while.  We will also be hosting our annual Medicare symposium on October 5th, however this will continue to be virtual for the time being and those details will be out shortly as well. 

Welcome to autumn and maybe start that Christmas shopping a little early, ok? 

If you have questions, please contact us.

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To download the September 2021 Newsletter: CLICK HERE