Work, Work, Work
Happy Labor Day! With the holiday upon us it has most likely evoked thoughts regarding the
end of summer, start of school, and the beginning of football season. Even though Labor Day
has its roots imbedded with organized labor when it became a federal holiday in 1894, the
recognition of the day is about all working people. Therefore, what may also come to mind is the
term “work” since spending time at jobs encompasses a large portion of waking hours for most
American adults.
Not only are jobs a vital part of our individual lives since they allow us to provide for ourselves
and our families, overall employment is an integral part of the economy due to other core drivers
of economic growth, namely consumer spending, being directly affected by employment. This is
recognized by the U.S. government which is why the Federal Reserve operates under a “Dual
Mandate” – the goal of fostering economic conditions that achieve stable prices and maximum
sustainable employment. Because of the importance of the national employment situation,
there is a great deal of attention paid to the monthly Payroll and Unemployment Reports
released by the Bureau of Labor Statistics (BLS) on the first Friday of each month. These
reports currently have an added emphasis as we ascertain how well the labor force is
recovering from the pandemic and how quickly new jobs are being created, giving an indication
of sustained economic growth.
Here at Secured Retirement we focus our efforts on helping people realize their financial goals
as they transition from the workforce. We also want to recognize that the work of Americans,
such as yourselves, over the past several decades has contributed to the strongest economic
growth in history.
Markets Continue Upward
The major stock market indices were all higher for the month of August, with the S&P 500
logging its seventh straight monthly gain. This was primarily attributable to accommodative
monetary policy and strong corporate earnings reports. Our continued market optimism is
based upon earnings growth which has consistently surpassed prior expectations over the past
few quarters and gives no indication of slowing down. Economic data during the month
remained positive but did moderate from the strong year-over-year growth reported the previous
few months, which is to be expected since the comparisons are now reaching a point where a
year ago the economy was normalizing after the post-pandemic shutdown. The one damper on
the markets was the increase in Covid cases attributable to the Delta variant and worry of
restrictions being re-imposed. This especially had an impact on energy prices due to concerns
over global demand. There are now signs the trend in case increases has peaked and fears of
wide-scale restrictions have abated, so hopefully this should be less of a headwind for stocks.
Looking Ahead
September is shaping up to have the potential for volatility in the markets. According to
research firm CFRA, the S&P 500 has been negative 45% of the time since World War II with
an average decline of 0.56%. However, the index has shown positive returns three out of the
past four years. It is not history that concerns us this year, but rather the anticipated events
which have the potential to move markets, specifically political wrangling over infrastructure and
spending bills plus policy changes to the Federal Reserve’s quantitative easing program as we
expect they will begin to taper, or reduce, the monthly bond buying program. The markets have
been fairly steady over the past few months, but these policy actions could be catalysts for
greater volatility and a rotation between favored market sectors. We continuously monitor the
markets and make changes to portfolios as needed to protect against volatility and profit from
opportunities.
Labor Day is generally considered to be the unofficial end of summer, but this is not necessarily
bad news since autumn is arguably the most favored season here in Minnesota. This holiday is
observed for all working people, past and present, so be sure to take time to enjoy it. The
benefactors of our robust American economy and way of life, which is each and every one of us,
thank you for your work.
Have a wonderful week!
Nathan Zeller, CFA, CFP®
Chief Investment Strategist
Secured Retirement
nzeller@securedretirements.com
Please contact us if you would like to review your individual financial plan or learn how the
TaxSmart™ Retirement Program can help you.
info@securedretirements.com
Office phone # (952) 460-3260
