The S&P 500 index ended the week in the red, snapping a two-week winning streak. The benchmark average closed the week down 1.67% from the previous Friday’s close. With five consecutive losses, this was the worst week for the S&P 500 since February.
Investors’ pivot into more defensive assets such as Treasuries was driven by worries about the longevity of the economic recovery and the spread of the Delta variant while global central bankers make preparations to exit pandemic-era stimulus programs. All sectors of the S&P ended the week in the red, with the real estate sector taking the brunt of last week’s selling pressure, down nearly 4% from last Friday’s close.
Healthcare stocks were also under heavy selling pressure with the sector down 2.7% from last week. Supply chain disruptions continued to weigh on the industrial sector, down for a second straight week with a loss of 2.5%. The tech sector started the week near record highs, dodging a broad market sell-off but ultimately ended the week 1.8% lower. The consumer discretionary sector nearly ended the week in the green, but ultimately lost ground in sympathy with a broad market sell-off.
A dearth of key economic data last week was offset by a strong Treasury refunding. Investors eagerly scooped up $120 billion in three-year notes, 10-year notes, and 30-year bonds, driving Treasury yields lower, and dampening demand for financial stocks amid declining lending rates. The sector was down 1.3% on the week.
The Fed released their Beige Book last week with the Delta variant of COVID-19 making a prominent appearance, mentioned more than 30 times in the report. Dining and travel were noticeably impacted while sectors like manufacturing and transportation remained strong.
Next week’s calendar includes the consumer price index on Tuesday, the Empire State manufacturing index, production data on Wednesday and retail sales Thursday.
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