Market Update - May 16, 2021
Hope all is well. The s&P 500 and the Dow both fell more than 1%. The NASDAQ dropped more than 2% and lagged the S&P 500 for the fifth week in a row. While the week's overall declines weren't huge, the market's path was choppy. Big declines on the first three days of the week that sent the NASDAQ down a total of 5.2% before rebounding with positive results on Thursday and Friday. I have broken down this week's news using a couple of my favorite commercials from the 80s.
This week began with a large section of the country asking Where's the Gas? The Colonial pipeline has returned its entire system to normal operations and is back delivering millions of gallons of fuel per hour after a ransomware attack forced the company to shut its network 8 days earlier. The company said Saturday that its pipeline is now servicing all markets. However, there are still widespread fuel shortages in many of the markets serviced by the pipeline. In Washington D.C. gas stations are without fuel. In North Carolina 63% of stations are short, in Georgia and South Carolina more than 40%, and in Virginia 38%. The pipeline disruption led to the pull back the markets experienced at the beginning of the week.
The post pandemic economy would have brought sanity to Crazy Eddie whose commercials in the 80's screamed that their low prices were INSANE. Prices are going up everywhere. Inflation surged by the most in any 12-month period since 2008. The Consumer Price Index (the most common gauge of inflation) jumped 4.2% for the 12-month period that ended in April. The jump in inflation caused the early week sell off to intensify on Wednesday.
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