October 11th, 2021
Dear Clients/Prospective Clients/Partners:
The markets finished with a whimper in September, down 3-4% depending on the index. The hot streak couldn’t last forever, and the big tech companies have started to take a beating. It’s well overdue though, as they have led the way in growth for many quarters now. We will see if earnings have hit their climax and are stretched or if the September swoon turns into something greater. Time will tell but it was an interesting and volatile month.
Our economy continues to struggle with rising inflation. Have you been to the grocery store or a Target lately? Wow! Prices are going up quickly with no end in sight. Supply chain issues on just about anything you purchase. Have you seen the cargo and oil/fuel ships off the coast of California on the Pacific Ocean and in other portside cities? You might want to take a trip to a big box store and start stocking up on some supplies. Other countries are having blackouts, limiting electricity and scheduling less factory shifts. We own a few energy companies and the stocks have performed extremely well but scarcity will become an issue. It has been mentioned by many experts that propane and natural gas prices will be very high this winter season. It might get worse before it gets better.
U.S. jobs growth of a lowly 194,000 jobs in September did not meet expectations. There continues to be a shortage of workers across many industries and people aren’t going back to work nearly quick enough. These 194,000 jobs created are down from 366,000 in August. Unemployment did drop in September from 5.2% to 4.8% but this was due to many workers giving up their job search and some exiting the labor force. This means that there was a smaller pool of applicants looking for work. The economy is in an unusual position. Households flush with cash and increased spending by consumers on goods and services but businesses are struggling to find workers to serve them. This is being felt both in the U.S. and globally. We worry that this may continue to be an issue as variants of the coronavirus continue to make people scared and sick. There is a plethora of information and misinformation out there on how to make this polarizing world safer and better. The problem is many Americans don’t trust the media and worse don’t trust each other or listen to each other.
I mentioned in my January letter to buckle-up for 2021, as it may be a bumpy ride. Tighten that seatbelt a little more as we’re not done yet. Do try to get out there and enjoy the little bit of warm weather we’re squeezing out of October and enjoy the fall colors!
Sincerely,
J.B. L’Esperance, ChFC
If you have questions about our strategies or would like to open an account with Barking Sands Capital, please give us a call at 952.500.8854 or 248.687.1400.