Yesterday, the Fed finally decided to start the tapering of its asset purchases. It was pretty anticlimactic as the Fed has been hinting at this for many months. Further, the economy is in a much better place than it was when these policies were initiated. Just look at the S&P 500 (SPY) at all-time highs, real estate prices at new highs in many places, consumption at new highs, and business investment at new, post-pandemic levels. In today’s commentary, I want to discuss the Fed’s decision and what this tells us about the current cycle. Read on below to find out more….(Please enjoy this updated version of my weekly commentary published November 04, 2021 from the POWR Stocks Under $10 newsletter).
Over the last week, the market’s advance has continued with the S&P 500 up by nearly 2%. Even more impressive is the Russell 2000’s more than 4% gain.
This small-cap outperformance is not too surprising given that Congress seems to be getting closer to an agreement on a final infrastructure and reconciliation package that should come in around $3 trillion.