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3RD QUARTER EQUITIES

Equity Market: The equity indexes moved higher in July and August continuing the rebound that started in April 2020. The S&P 500 struck a record level of 4536.95 on September 2.  Then the “worries” hit the market – topped by the Delta variant and the Fed’s announcement of plans to taper bond purchases.  September became the worst month since the pandemic panic of March 2020.

The Dow Jones Industrial Average fell 2.3% for the quarter, but was still ahead 10.6% for the year-to-date.  The S&P 500 was ahead .2% for the quarter and 14.7% for the year. The Nasdaq Composite was down just .1% for the quarter and ahead 12.1 % for the year-to-date. The Russell 2000 index was hit the hardest with a 5.4% decline in the quarter – reducing its year-to-date gain to 11.6%.   

Preferred Equities: As always, despite market conditions, we look for long-term equity opportunities. Our focus is on companies that can weather both the short-term period and flourish in a longer time frame. We want fundamentally sound companies with reasonable valuations and that pay dividends. In that context, similar to last quarter, we are looking at these sectors:

HEALTH CARE: This sector has interesting opportunities in bio-technology and in the variety of new treatments being developed for the aging population.  

FINANCIALS: Somewhat higher interest rates may benefit the financial sector – and regional banks are appealing  

INDUSTRIALS/MATERIALS:  President Biden’s plans for infrastructure investment, if enacted, should create opportunity for many companies in this sector.

TECHNOLOGY: We are holding but not expanding our allocation to the FANG stocks.  We are interested in selective technology companies with emphasis on innovation.  

ENERGY:  This sector has opportunities worth exploring in traditional oil and gas industries and in the electric companies that will be modernizing their power grids.


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