The Markets

The Delta variant could take a toll on economic growth.

There was some good news last week. The 7-day moving average of COVID-19 cases in the United States declined. The bad news was that the rate of infection remained about 99 percent higher than it was one year ago.

As Delta variant infections surged across the United States, expectations for economic growth dropped more sharply than anticipated. Lisa Beilfuss of Barron’s reported on changes to third-quarter forecasts for U.S. gross domestic product (GDP) growth.

“Goldman Sachs cut its forecast to 3.5% from 5.25%, Oxford Economics revised its call to 2.7% from 6.5%, and Morgan Stanley lowered its estimate to 2.9% from 6.5%. That’s as the Atlanta Fed’s GDPNow model predicts 3.7% for the quarter, down from 5.3% at the start of the month,” Beilfuss wrote in Barron’s.

Economists aren’t the only ones revising expectations. Some companies have cautioned that their revenue and earnings expectations were too high. Several airlines reported that cancellations have increased and ticket purchases have declined, which will impact the companies’ financial performance. In addition, some manufacturers indicated that unresolved supply chain issues and the high cost of raw materials will affect their performance for the quarter, reported Yacob Reyes and Sam Ro of Axios.

A chief investment officer cited by Axios said it’s unlikely that many more companies will cut their revenue or earnings forecasts; however, “…he does expect fewer companies to announce better-than-expected earnings when they announce Q3 results.” During the second quarter of 2021, 87 percent of companies in the Standard & Poor’s 500 Index reported better-than-expected earnings.

Last week, major U.S. stock indices trended lower, reported Al Root of Barron’s. The yield on 10-year Treasuries also finished the week higher.

Data as of 9/10/21 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 Index -1.7% 18.7% 33.5% 15.7% 15.6% 14.4%
Dow Jones Global ex-U.S. Index -0.5 9.2 25.7 8.6 7.8 5.4
10-year Treasury Note (yield only) 1.3 NA 0.7 2.9 1.7 1.9
Gold (per ounce) -1.5 -4.9 -8.7 14.5 6.3 -0.2
Bloomberg Commodity Index 0.0 24.4 35.8 5.4 2.9 -4.8

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, MarketWatch,, Federal Reserve Bank of St. Louis, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Upside-Down Rhinoceri and Other Improbable Stuff

It’s September and paper airplanes were flying across screens at the 31st First Annual Ig Nobel Prize virtual ceremony.

The Ig Nobels recognize the unusual and celebrate the imaginative to rouse interest in science, medicine and technology. Every year, 10 prizes are awarded for research that makes people laugh and also makes them think. Commemorative awards are given to the winners by actual Nobel laureates. This year’s outstanding research included:

Biology prize: Susanne Schötz, Robert Eklund and Joost van de Weijer received an Ig Nobel for their work in cat acoustics. The introduction to “A Comparative Acoustic Analysis of Purring in Four Cats” explains, “The domestic cat is one of the most popular pet animals in the world, and virtually everyone is familiar with its trademark ‘purring’ sound. Contrary to what might be believed, it is not known exactly how purring is produced, and there is a surprising lack of studies of purring, even descriptive.” The scientists have also studied cat chirping, chattering, trilling, tweedling, murmuring, meowing, moaning, squeaking, hissing, yowling, howling and growling.

Ecology prize: Did you know the United Kingdom spends almost 70 million euros each year cleaning chewing gum residue from pavement? In addition to providing that bit of trivia, Ig Nobel winners Leila Satari, Alba Guillén, Àngela Vidal-Verdú and Manuel Porcar offered insight to “…the microbial content of [improperly discarded] chewing gums sampled in different locations worldwide as well as the distribution of bacteria depending on the depth (surface, intermediate and bottom layers of the residue).” The findings may have implications relevant to forensics, contagious disease and cleaning up chewing gum.

Chemistry prize: “Proof of Concept Study: Testing Human Volatile Organic Compounds as Tools for Age Classification of Films,” which has 10 contributing authors, examined a new method for rating movies: Measuring the emissions of humans watching the movies. “Humans emit numerous volatile organic compounds through breath and skin. The nature and rate of these emissions are affected by various factors including emotional state. Previous measurements of [these emissions] in a cinema have shown that certain chemicals are reproducibly emitted by audiences reacting to events in a particular film.”

Transportation prize: Have you ever wondered whether hanging a rhinoceros upside down would affect its health, a team from Cornell University has the answer. These researchers suspended a dozen tranquilized rhinos upside-down for 10 minutes to simulate a common form of transfer used by wildlife conservationists in Africa. The finding, published in the Journal of Wildlife Diseases, was that it may be safer to transport a rhino upside down rather than on its side.

Prizes also were awarded in the fields of entomology, physics, kinetics, medicine, economics and peace.

Weekly Focus – Think About It

“The most exciting phrase to hear in science, the one that heralds the most discoveries, is not ‘Eureka!’ but ‘That’s funny…’”

—Isaac Asimov, Biochemistry professor and author

Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management

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