Stocks finished another volatile quarter with the market ending little changed. The Standard & Poor’s 500 Stock Index rose 0.6% despite a 1.2% loss on the final day. Several issues weighed on the market including:
Inflation expectations, as the CPI for Urban Consumers rose 0.3% in August and 5.3% over the last 12 months.
Supply chain issues as semiconductor shortages impacted auto production and other industries, while over 80 ships were anchored off Long Beach California waiting to unload goods.
Labor shortages continue as help wanted signs spring up around the country.
Political struggles to find common ground regarding infrastructure spending and the debt ceiling.
Concerns over rising interest rates, since the Federal Reserve indicated it will reduce bond purchase later this year. Additional uncertainty regarding the Fed as the reappointment of Chairman Jerome Powell has become less certain.
The persistence of the Covid-19 Virus.
While we finished a volatile, lackluster quarter, the S&P Index is up almost 16% for the year through September 30th. Employment remains strong and the economy has shown resilience to the Covid-19 Virus. Interest rates, while up a bit, remain near historic lows.
We will have to wait to see how these issues play out. However, we will continue investing in quality companies with strong balance sheets whose management teams have proven their ability to cope with changing environments.