The Market & Legal Update is a monthly publication circulated by USI Advisors, Inc. and is designed to highlight various market and economic information, and provide timely regulatory updates.

November 2021 Market & Legal Update
“Omicron, Fed Policy Pivot Contributes To Markets Declining”
Markets declined sharply during the last few trading days of the month with the Dow posting its largest drop of 2021 on Black Friday, losing 1.9%, and the S&P 500 falling 2.3% on the same day. As a result, the S&P 500 declined by 0.7%, the Dow fell by 3.5%, and the MSCI EAFE index lost 4.7% during the month. Equity markets advanced for most of the month on continued strong earnings and economic growth. However, news about the new Omicron variant, which the World Health Organization labeled it as a “variant of concern”, coupled with the Federal Reserve announcing it could expedite its bond buying program to conclude sooner than economists projected to combat inflation caused significant market volatility to close out the month.

October 2021 Market & Legal Update
"S&P Posts Best Month in Nearly a Year"
After hitting a period of turbulence in September, markets reached new highs in October. Some of the major worries that were weighing on investors’ minds last month have faded a bit in recent weeks. New coronavirus cases have come down nearly 60% since the September spike during the fourth wave of infections. Worries about the U.S. defaulting on its debt eased when a deal was reached in October to extend the nation’s debt limit through the end of December. Finally, even though third quarter GDP came in below forecasts and much lower than prior quarters during the recovery, it is anticipated that growth will accelerate in the fourth quarter. The Dow Jones Industrial Average (DJIA) gained 5.9% in October, pushing the year-to-date return to a new high at 18.8%. The S&P 500 had its best monthly rally since November of last year, edging 7% higher in October and 24% year to date. The tech-heavy Nasdaq Composite index added 7.3%.  Finally, in the bond market, the yield on the benchmark 10-year U.S. Treasury note moved from 1.52% to 1.55%. The US Bloomberg Aggregate remained flat during the month and is down –1.6% for the year.

September 2021 Market & Legal Update
“The Stock Market Sputters in September"
The U.S. equity markets were quite volatile in September, closing the month down from near record highs at the end of August. Whether it was fears of a possible U.S. default, rising inflation driven partially by supply-chain bottlenecks or the spread of the highly contagious Delta variant, fear reigned supreme in the month and caused markets to move downward. The S&P 500 plunged 4.7% in September, ending a streak of seven straight months of gains. Losses were rampant across the board from a sector standpoint, with only the energy sector posting a gain in the month. Fortunately, the index is still up 15.9% in 2021. The Dow Jones Industrial Average (DJIA) didn’t fare much better, dropping 4.2% for the month, bringing the year-to-date return to 12.1%. The tech-heavy Nasdaq Composite index lost more than both, falling 5.3% but is still in line with the DJIA on a year-to-date basis. Finally, in the bond market, the yield on the benchmark 10-year U.S. Treasury note jumped significantly, from 1.30% to 1.52%. Not surprisingly, the Bloomberg U.S. Aggregate Index lost 0.9% for the month and remains negative in 2021.

August 2021 Market & Legal Update
“Stock Market Jumps to Record Highs Amid Virus Worries”
The U.S. equity markets continued to log solid gains last month in thin summer trading, supported by the full FDA approval of the Pfizer-BioNTech COVID-19 vaccine, favorable economic data, the Fed’s continued stance on the pace of tapering, and a strong earnings season. Corporate profits jumped to fresh record highs in the second quarter of this year, propelled in part by strong economic activity and record fiscal stimulus. The S&P 500 added 3% last month, nearly doubling from its low in March 2020. With seven-straight months of gains, the benchmark index has posted an impressive gain of 22% year to date and 53 record closes, its highest number of records in a calendar year though August. The Dow Jones Industrial Average lagged its equity benchmark peers during the month, albeit still advancing 1.5% in August. The tech-heavy Nasdaq Composite index also finished the month up 4%, its third consecutive month of gains, lifted by a strong rally in information technology stocks. In the bond market, the yield on the benchmark 10-year U.S. Treasury note jumped to 1.30% from 1.24% in the prior month, snapping a four-month losing streak.

July 2021 Maket & Legal Update
"In the Spirit of the Olympics, the U.S. Economy and Markets are Setting New Records!”
With the Olympics finally arriving a year later, major U.S. equity market indices continued to reach new highs, led by the S&P 500 advancing 2.4% during July and 18.0% year-to-date. Developed economies are experiencing rapid growth, U.S. corporate profits are on pace for a banner quarter, the highest net fund flows into U.S. based funds was recorded, and a new, up to $1 trillion bipartisan infrastructure bill was reached on July 28. In addition, the Federal Reserve affirmed its low interest rate policy, although some signs are pointing to the Fed beginning to reduce its quantitative easing program later this year. Despite the strong economy and global markets, there is rising concern regarding the Delta variant of Covid-19 spreading rapidly throughout the world. The Centers for Disease and Control and Prevention (CDC) issued guidance on July 28 recommending tighter policies to curb the spread of the disease.

June 2021 Market & Legal Update
"U.S. Stock Market Ends the Second Quarter at Record New Highs"
June marked the fifth consecutive month of positive gains in the stock market and the S&P 500 Index closed out a strong first half of the year with a 15.3% return. Widespread vaccinations are allowing the economy to start reopening and consumers to resume their pre-pandemic spending habits, especially as we head into the summer season. However, inflation concerns remain in the spotlight while the Federal Reserve remains committed to maintain interest rates unchanged until full employment is reached.

May 2021 Market & Legal Update
“Markets Continue to Defy Gravity…and Inflation Fears”
Despite inflation fears, much of the equity market continued to rise in May. The Dow Jones Industrial Average (DJIA) and S&P 500 Index both climbed during the month as corporate profits continued accelerating, vaccination levels continued increasing and the overall economy continued to prosper. The S&P 500 Index gained 0.7% in May and is up over 12.6% for 2021 while the DJIA tacked on another 2.2% and is up 13.8% year to date. The tech-heavy NASDAQ index pulled back a bit in May, losing 1.5% but is still up 6.7% thus far in 2021.

April 2021 Maket & Legal Update
"Corporate Profits and Economic Indicators Continue to Rise"
The Dow, S&P 500, and Nasdaq reached new highs during the month, as corporate profits accelerated, the economic outlook continued to prosper, new fiscal policy was announced, vaccinations across the U.S. progressed, and declining coronavirus cases were reported. The Federal Reserve continued to maintain its low interest rate policy and indicated that it will maintain the Fed Funds rate through 2023. The S&P 500 Index gained 5.3%, which was its best month since November 2020, as treasury yields took a pause from steadily rising each month since late last year.

March 2021 Market & Legal Update
“Are We There Yet? Not Yet!”
Global markets largely rose in March despite increased volatility at the beginning of the month as investors weighed accelerated economic activity against growing inflation concerns and rising interest rates. The Federal Reserve, however, is not as concerned about inflation and decided to leave interest rates unchanged for an extended period, at least through 2023...

February 2021 Market & Legal Update
“Bond Yields Surge Amid Signs of Economic Recovery”
U.S. equity markets finished higher in February, erasing their losses from the prior month, as positive developments on the coronavirus front, improving economic data, strong corporate earnings, and prospects of another fiscal stimulus package continued to boost investor sentiment.

January 2021 Market & Legal Update
“Nobody Wants a Repeat of 2020…Except Investors”
The year 2020 will always be remembered for the debilitating effects of the COVID pandemic and the immense political turmoil that threatened to divide the country. So, as 2020 came to a close, many thought “good riddance” and were looking forward to the New Year. Well everyone, that is, except investors.