Weekly Update
Solar Asset Management N.V.
One of the top independent asset management companies in Curacao and Aruba.
Financial Markets & Economies
The U.S. saw a high number of airline passengers passing through their airports in the 4th of July holiday weekend. The Transportation Security Administration (TSA) recorded 2.2 million airline passengers on Friday and 1.7 million on Sunday 4th itself. These numbers are higher than on the same dates of 2019. More traveling, more spending, more production. You know the drill!
The black gold (oil) does not cease to amaze its investors. The oil price reached a 6-year high on Monday but retreated later in the week. The increase was spurred by production policy disagreements between the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing countries. Short-term up and down price movements are to be expected in investing. The oil trendline however is still upward.
Stock markets in general has been mixed through midweek with technology stocks picking up steam. Later in the week the major stock indices declined due to concerns of global economic recovery slowdown seeing the magnitude of the Covid-19 Delta variant. As we have seen multiple times in the past, these concerns are often times short lived.
Good to know
We continuously speak about the global economic recovery and the impact it will have on stock markets. One thing that is not often highlighted is the fact that the recovery is uneven. We are not talking about being uneven per sector or asset class but on an individual basis. There are stark contrasts in certain figures. Unemployment level for instance is still relatively high (5.5%) compared to pre-pandemic levels (3.7%) while the U.S. household net worth is at its peak hitting $136.9 trillion thanks largely to the stock market gains and the increase in real estate values.
The difference maker is clearly investing. The ones privileged (and wise) to have been invested throughout the period has reaped the benefit. There is much more to gain seeing the consensus on an extended period of economic growth. The recovery and boom of household net worth is not only limited to the U.S., however. The same is observed on a global level. The increased consumption we are seeing now comes mainly from high-income consumers. High-income consumer spending is now 11% above pre-pandemic levels in the U.S. The recovery moving forward is thus tilted towards the consumptions of the affluent.
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