We hope that you are doing well. Please take the time to read through this month’s edition of our newsletter to keep up-to-date with our thoughts about the market and happenings around the office. The month of July kept us quite active featuring both seminars and in-office meetings with clients. Although we do not have any events scheduled for August, stay tuned for our Fall series of seminars and events as we kick off season 2022. The end of July has also concluded this year’s summer internship program. Our three industrious summer interns assisted in several beneficial projects and developed a deeper understanding of all facets of our business. Their experience ran the gamut from sales and marketing to client relations and operations.
Additionally, we have added several new hires—one a former intern—bringing our total headcount to 35. We are proud of our growth, which we believe continues to enhance our client service, ensuring that each and every one of our clients receives the highest standard of responsiveness and attention. The markets remain focused on comments from the Federal Reserve, particularly those from Chairman Jerome Powell and other Federal Bank Presidents. While inflation readings have been hotter than expected, it hasn’t influenced the Fed’s transitory viewpoint with Powell indicating “substantial further progress is still a ways off.” While there continues to be concern around the novel Delta variant of coronavirus, investors’ confidence in our nation’s economic recovery appears largely undeterred. We believe that the key underlying factors supporting strong equity markets in the second half of 2021 are (1) the belief that inflation is transitory, (2) strong global growth, (3) continued monetary support from the Federal Reserve and (4) over $5 trillion in fiscal stimulus and counting.
As always, please let us know if you have any questions or if we can be helpful in any way. It is our pleasure and privilege to serve you, and we appreciate the trust that you have placed in us.
MONTHLY MARKET COMMENTARY
“When EF Hutton talks, people listen.” Remember that commercial? Today, the man everyone is listening to is Federal Reserve Chairman Jerome Powell and for good reason. The Fed’s actions on monetary policy in the coming months and years have the potential to be enormously influential on both markets and the broader economy, particularly when it comes to inflation. However, important as the Fed is, it would be unwise to lose sight of the larger picture. As we enter into another earnings season, now is a good time to take stock of that vital measure of corporate profitability.
THE FED AND COVID
The COVID pandemic and associated economic downturn was an unprecedented shock to the global economy. A novel virus with no effective therapeutics spreading across the globe prompted mandatory lockdowns in a desperate attempt to contain the threat. Consequently, consumer demand plummeted. Companies responded by idling factories and laying off workers as supply chains around the world were thrown into disarray. With the market and economy in a nosedive, the Fed needed to act quickly and boldly; to their credit, they did just that. The Fed flooded the financial system with liquidity and proposed a veritable buffet of lending programs, driving down interest rates and staving off widespread failures and bankruptcies. Simply put, in our opinion, the Fed saved us.
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