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S&P Reaches Fresh Highs as Real Estate, Health Care, and Financials Gain

Weekly Update – October 22, 2021

  • The S&P 500 index rose 1.6% last week and reached fresh record highs amid better-than-expected Q3 corporate earnings and positive economic data.
  • The market benchmark ended the week at 4,544.90, up from last Friday’s closing level of 4,471.37. The index reached its highest level ever Friday at an intraday high of 4,559.67 although it ended the day slightly below Thursday’s record closing high of 4,549.78.
  • With just one trading week left in the month, the S&P 500 is now up 5.5% for October to date. It is up 21% for the year to date.
  • The weekly climb came as many US companies’ Q3 earnings reports surpassed analysts’ expectations. In addition, weekly jobless claims fell to fresh pandemic lows while US existing home sales rose 7% in September to a seasonally adjusted annual rate of 6.29 million units from 5.88 million in August, exceeding expectations for a rise to 6.1 million in a Bloomberg poll of forecasters.
  • All but one of the S&P 500’s sectors rose last week. Real estate had the largest percentage increase of the week, up 3.2%, followed by a 2.9% gain in health care and a 2.8% rise in financials. The one sector in the red was communication services, down 0.6%.
  • The real estate sector’s gainers included Prologis (PLD), which reported annual growth in Q3 results a week ago as the logistics real estate company benefited from a record gain in market rents, which prompted it to raise the full-year outlook. Shares climbed 5.1% last week.
  • In health care, shares of Anthem (ANTM) jumped 10% as the health insurance provider increased its full-year guidance after reporting better-than-expected Q3 results.
  • Among the gainers in financials, State Street (STT) shares rose 7.2% as the bank holding company reported Q3 adjusted earnings per share and revenue above year-earlier results and analysts’ expectations.
  • On the downside, the decliners in communication services included Omnicom Group (OMC), which reported Q3 earnings per share above analysts’ expectations but had lower-than-expected revenue. Shares fell 7.3% for the week.
  • Next week, the companies expected to release quarterly results include Kimberly-Clark (KMB), Facebook (FB), 3M (MMM), General Electric (GE), Boeing (BA) and Merck (MRK).
  • The economic data expected next week are expected to feature September new home sales and pending home sales in addition to the August S&P Case-Shiller home price index. October consumer confidence, September consumer spending, and September core inflation will also be released.
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