Weekly Market Commentary
October 6, 2021

September strikes again…

The Markets

If you look back over the last 20 years, September has been the least performing month for many of the years. This year, the S&P 500 dropped 4.8 percent in September. That wasn’t enough to wipe out gains from earlier in the third quarter, and the Index finished the quarter slightly higher

There was a lot of concerns during September and over the third quarter including:

•    Resurgence of the coronavirus. One result of COVID-19 is that life expectancy at birth fell from 2019 to 2020. In the United States, life expectancy at birth has fallen by more than one year. Italy, Poland and Spain also have seen life expectancy drop by more than one year.

•    Global economic growth concerns. The resurgence of COVID-19 also dented global confidence that the world economy will improve during the next six months. Survey respondents said the top risks to economic growth were the pandemic, supply chain disruptions and inflation.

•    Supply chain disruptions. The supply chains issues created by the pandemic have not been easy to resolve. Essential freight-handling equipment too often is not where it’s needed, and when it is, there aren’t enough truckers or warehouse workers to operate it. Toward the end of September, more than 70 container ships were anchored near the West coast, waiting for a berth to open so goods could be delivered.

•    Rising inflation. The cost of producing goods has been increasing. When producer costs rise faster than consumer prices, companies’ profitability may drop and that could affect earnings.

•    Tightening central bank policy. The Federal Reserve is concerned about inflation, too, and is considering a move toward less accommodative monetary policy.

Despite these challenges, the fourth quarter got off to a good start on Friday. Eighty percent of the companies in the S&P 500 saw their share prices rise. The S&P 500 gained 1.2 percent for the day, while the Dow rose 1.4 percent, and the Nasdaq gained 0.8 percent. Most of the S&P 500 companies are exceeding earnings compared to a year ago so there is a lot of strong data offsetting the concerns discussed above.

CAN WE TALK? The pandemic accelerated the adoption of autonomous checkouts at retailers. Some stores have self-checkouts, while others have installed a “combination of sensors, cameras, computer vision and deep learning” that makes it possible to eliminate cashiers and checkouts entirely.

At the other end of the shopping-experience spectrum is the “Kletskassa,” also known as the “chatty checkout,” which was implemented by a large grocery store chain in the Netherlands. It’s a checkout line that promises conversation with the cashier.

“1.3 million people in the Netherlands are older than 75 years – and one large supermarket chain is making sure they’re not getting too lonely in their elder years. The Dutch government with its campaign, ‘One Against Loneliness,’ has galvanized organizations, towns, companies, and individuals to find solutions.

The slower, chatty lane was developed specifically for older citizens, but may appeal to a much wider group of people on days when they have the time to engage.