Don’t call it a comeback, because the rally never left…
After hitting the pause button in September, major US indices reached fresh record highs in October as the S&P 500 gained 6.91%, the Dow 5.84%, and the Nasdaq 7.27%. Strong earnings reports helped boost gains for the month. Growth oriented companies led the way, and larger companies fared better than smaller companies, though stocks as a whole were positive.
Consistent with the longer-term trend in recent years, international stocks continued to lag behind the US, thanks in part to sluggish economic growth and a myriad of negative headlines.
Emerging markets in particular have been lackluster in 2021 (though still slightly positive).
Aggregate US bonds were relatively flat for the month as the 10-year Treasury yield ticked up marginally, from 1.52% to 1.55%. So far in 2021, traditional bonds are still slightly negative while higher yielding / riskier bond asset classes are modestly positive.
As we head into the holiday season, inflation data and supply chain bottlenecks are sure to be the talk of every family get-together this year.
What’sa meta with you?
Facebook announced it will be changing its corporate name to Meta, as it looks forward toward creating “the next chapter of the internet” – the metaverse.
What exactly is the metaverse? Roughly speaking, it would be a place where people do everything they normally do in real life, just in digital form as avatars (even experts have a hard time explaining this one).
Investments in the project, which include hiring 10,000 new employees to work on it, are estimated to total $10 billion in 2021.
The timing of the rebrand is peculiar to some critics, as Facebook (I mean Meta) has been dealing with a wave of criticism.
Earlier in the month, a whistleblower turned over tens of thousands of internal documents, pointing to flaws in the social media platform and its policies.
Hertz, donut.
The rental car company, which filed for bankruptcy in May 2020 before emerging back out in June 2021 after raising new funding, just ordered a fleet of Teslas.
Over the course of the next 14 months, Hertz will reportedly buy 100,000 Teslas, estimated to be worth $4.2 billion.
Experts see this as a win-win. Hertz will be an industry leader for people looking to rent electric vehicles (20% of its cars will be electric by the end of 2022), and Tesla will get more exposure for people to test their cars without a large cash commitment (think potential higher future sales).
The announcement sent Tesla shares surging higher, to a market capitalization of more than $1 trillion. Tesla is now worth as much as 19 other automakers combined, including Ford, GM, and Toyota, among other major names.
Broad Market Returns
| Index | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | 7.04% | 5.06% | 24.09% | 42.83% |
| NASDAQ (QQQ) | 7.86% | 6.03% | 23.50% | 44.10% |
| Large Cap Growth (VUG) | 8.26% | 6.26% | 24.49% | 43.11% |
| Large Cap Value (VTV) | 5.44% | 3.40% | 22.02% | 42.41% |
| Small Cap Growth (VBK) | 5.51% | 3.43% | 10.69% | 36.92% |
| Small Cap Value (VBR) | 4.56% | 4.01% | 25.89% | 57.88% |
| Developed International (VEA) | 3.23% | 1.04% | 12.24% | 35.51% |
| Emerging Markets (VWO) | 1.30% | 0.04% | 2.70% | 18.18% |
| REITs (VNQ) | 7.13% | 3.22% | 30.86% | 47.45% |
| Aggregate Bonds (BND) | 0.07% | -1.13% | -1.75% | -0.41% |
| Corporate Bonds (VCIT) | -0.37% | -1.75% | -1.74% | 0.78% |
| High Yield Bonds (JNK) | -0.32% | -0.02% | 2.94% | 8.86% |
| Long Term Treasuries (VGLT) | 1.89% | -1.23% | -5.61% | -5.30% |
| International Bonds (BNDX) | -0.44% | -1.94% | -2.58% | -1.85% |
Fun Facts – November Edition
- Daylight Saving Time officially ends on Sunday, November 7 at 2:00am. Don’t forget to set your clocks back one hour!
- If you listen closely, you can hear the sound of dads everywhere falling asleep watching football, after stuffing themselves with turkey and pie. Thanksgiving will be celebrated on Thursday the 25th this year.
- If your belly isn’t full enough after Thanksgiving – Friday, November 26 is national cake day… Holiday calories don’t count, right?
- Some investors believe November brings in a strong seasonal period for markets (the opposite side of the “sell in May and go away” adage). However, it’s essential to remember every year is unique, so it’s important to make investment decisions based on data and underlying market circumstances rather than old sayings.
Derek Prusa, CFA, CFP® and Ben Webster, CFP®
Co-Founders and Owners of Aspire Wealth
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