There was some good news last week. The 7-day moving average of COVID-19 cases in the United States declined. The bad news was that the rate of infection remained about 99 percent higher than it was one year ago.
As Delta variant infections surged across the United States, expectations for economic growth dropped more sharply than anticipated. Lisa Beilfuss of Barron’s reported on changes to third-quarter forecasts for U.S. gross domestic product (GDP) growth.
“Goldman Sachs cut its forecast to 3.5% from 5.25%, Oxford Economics revised its call to 2.7% from 6.5%, and Morgan Stanley lowered its estimate to 2.9% from 6.5%. That’s as the Atlanta Fed’s GDPNow model predicts 3.7% for the quarter, down from 5.3% at the start of the month,” Beilfuss wrote in Barron’s.
Economists aren’t the only ones revising expectations. Some companies have cautioned that their revenue and earnings expectations were too high. Several airlines reported that cancellations have increased and ticket purchases have declined, which will impact the companies’ financial performance. In addition, some manufacturers indicated that unresolved supply chain issues and the high cost of raw materials will affect their performance for the quarter, reported Yacob Reyes and Sam Ro of Axios.
A chief investment officer cited by Axios said it’s unlikely that many more companies will cut their revenue or earnings forecasts; however, “…he does expect fewer companies to announce better-than-expected earnings when they announce Q3 results.” During the second quarter of 2021, 87 percent of companies in the Standard & Poor’s 500 Index reported better-than-expected earnings.
Last week, major U.S. stock indices trended lower, reported Al Root of Barron’s. The yield on 10-year Treasuries also finished the week higher.
Data as of 9/10/21
Standard & Poor's 500 Index
Dow Jones Global ex-U.S. Index
10-year Treasury Note (yield only)
Gold (per ounce)
Bloomberg Commodity Index
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; Federal Reserve Bank of St. Louis; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
Upside-Down Rhinoceri and Other Impossible Stuff.
It’s September and paper airplanes were flying across screens at the 31st First Annual Ig® Nobel Prize virtual ceremony.
The Ig Nobels recognize the unusual and celebrate the imaginative to rouse interest in science, medicine, and technology. Every year, 10 prizes are awarded for research that makes people laugh and also makes them think. Commemorative awards are given to the winners by actual Nobel laureates. This year’s outstanding research included:
Biology prize: Susanne Schötz, Robert Eklund, and Joost van de Weijer received an Ig Nobel for their work in cat acoustics. The introduction to “A Comparative Acoustic Analysis of Purring in Four Cats” explains, “The domestic cat is one of the most popular pet animals in the world, and virtually everyone is familiar with its trademark ‘purring’ sound. Contrary to what might be believed, it is not known exactly how purring is produced, and there is a surprising lack of studies of purring, even descriptive.” The scientists have also studied cat chirping, chattering, trilling, tweedling, murmuring, meowing, moaning, squeaking, hissing, yowling, howling, and growling.
Ecology prize: Did you know the United Kingdom spends almost 70 million euros each year cleaning chewing gum residue from the pavement? In addition to providing that bit of trivia, Ig Nobel winners Leila Satari, Alba Guillén, Àngela Vidal-Verdú, and Manuel Porcar offered insight into “…the microbial content of [improperly discarded] chewing gums sampled in different locations worldwide as well as the distribution of bacteria depending on the depth (surface, intermediate and bottom layers of the residue).” The findings may have implications relevant to forensics, contagious disease, and cleaning up chewing gum.
Chemistry prize: “Proof of Concept Study: Testing Human Volatile Organic Compounds as Tools for Age Classification of Films,” which has 10 contributing authors, examined a new method for rating movies: Measuring the emissions of humans watching the movies. “Humans emit numerous volatile organic compounds through breath and skin. The nature and rate of these emissions are affected by various factors including the emotional state. Previous measurements of [these emissions] in a cinema have shown that certain chemicals are reproducibly emitted by audiences reacting to events in a particular film."
Transportation prize: Have you ever wondered whether hanging a rhinoceros upside down would affect its health, a team from Cornell University has the answer. These researchers suspended a dozen tranquilized rhinos upside-down for 10 minutes to simulate a common form of transfer used by wildlife conservationists in Africa. The finding, published in the Journal of Wildlife Diseases, was that it may be safer to transport a rhino upside down rather than on its side.
Prizes also were awarded in the fields of entomology, physics, kinetics, medicine, economics, and peace.
Weekly Focus – Think About It
“The most exciting phrase to hear in science, the one that heralds the most discoveries, is not ‘Eureka!’ but ‘That’s funny…’”
-Isaac Asimov, Biochemistry professor, and author
Jess, Scott, & Andrew Peterson
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* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stocks of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/09-13-21_Washington%20Post_Denmark%20lifts%20all%20coronavirus%20restrictions_1.pdf)
https://www.axios.com/airlines-covid-ticket-sales-projections-43bac1f0-3bfa-43b0-b06f-01aeb2afecf1.html (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/09-13-21_Barrons_Heres%20an%20Inconvenient%20Truth_3.pdf)
https://www.barrons.com/articles/stock-market-selloffs-need-a-trigger-heres-what-could-cause-the-next-one-51631322248?refsec=the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/09_13_21_Barrons_A%20Stock%20Market%20Selloff%20Needs%20a%20Trigger_6.pdf)