October 12, 2021 | Investment Review

Investment Review - October 2021

  1. U.S. stocks retreated in September. The S&P 500 declined -4.7%, the Nasdaq fell -5.3%, and the Dow Jones Industrial average dropped -4.2%. Investor concerns included the perception of stretched valuations, inflation, rising interest rates, and political uncertainty.

  2. The ten-year treasury yield climbed to 1.54% from 1.30% at the end of August. The anticipated start of Fed tapering and inflation worries led bond buyers to demand higher yields.

  3. China’s second largest property developer, Evergrande, is facing a liquidity crisis. The firm has over $300 billion of debt, and was unable to make scheduled interest payments on September 23rd and 29th. Evergrande’s troubles may indicate a slowdown in China’s real estate market, which could present systemic risks to the nation’s economy. Bloomberg reports that real estate and related industries make up 30% of China’s GDP, and that urban Chinese residents have over 70% of their net worth in property.

Sources: Bloomberg LLC, FactSet, U.S. Commerce Department, Bloomberg Businessweek, IHS iSuppli

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