Defensive sectors led throughout this week as the Market absorbed data that showed a slowing economic recovery and meeting minutes from the Fed that indicated tapering could begin this year.
The market shrugged off worries about the Fed tapering of economic support to rally higher today. While the indexes were still below recent highs, the day was an excellent structural day, with gains shared broadly across the market.
Investors grappled today with reactions to the Fed meeting minutes released late on Wednesday. The minutes showed several officials in the Fed see the possibility that a key employment goal may be met before year-end and would allow tapering to begin. The result was a dip at open followed by a volatile day as the market priced in the impact .
Stocks slid after the Fed release meeting minutes from last month, raising fears that tapering support for the economy could come earlier than previously thought. Most sectors declined, with only Consumer Discretionary holding onto a gain for the day.
Disappointing retail sales data confirmed fears that the rising cases of the Delta variant are slowing down the economic recovery. That sent major indexes lower on Tuesday.
Investors sold off equities in the morning and then seemingly decided there was nowhere else to put the money and bought back assets in the afternoon. Capital moved back into the market, mostly into defensive sectors, sending the S&P 500 and Dow Jones Industrial (DJI) to another set of records.
The S&P 500 and Dow Jones set new records this week while the Nasdaq struggled with a rotation and indecision from investors. Small caps took a step back while value stocks marched forward.
Materials ( XLB ) led the sector list for the week, getting a massive boost on Tuesday and Wednesday after the Infrastructure bill passed the Senate. Industrials ( XLI ) also got a boost from the bill.
Consumer Sentiment data released this morning was lower than during the height of the pandemic, signaling the public is exhausted from wave after wave of COVID cases. The market didn’t overreact to the surprisingly low data, but caution was present with yields dropping and sectors used as defensive investments soaring.
Jobs data helped boost the markets to more records today, with big tech helping lead the way higher. The S&P 500 and Dow Jones Industrial Average closed at record highs for the third day in a row.