October 2021 Market Review

After September’s retreat, stocks surged in October as the S&P 500 recorded its best month of the year as corporate earnings showed strength and congressional leaders pushed towards a more moderate spending package. 

All eyes still remain on inflation and, while CPI, an indication of prices consumers pay, came in hotter than expected the PPI, an indication of what producers pay, showed moderation.  Market participants hope this is signaling a moderation of the inflation we’ve been experiencing.  A potential reduction in inflation expectations could give the Feds cover to continue the fiscal stimulus without fears of overheating the economy.  Interest rates ticked up modestly and the yield curve flattened; with the shorter end moving up (2 year treasury closed at .55% from .28%) and the longer end moving only a very small amount up (10 year closed at 1.55% from 1.49%).