In the US retail sales jumped 1.7% in October and as the week closed out the S&P 500 has now recorded 66 record-high daily closes in 2021. Traditionally Black Friday in the US signals the start of the holiday shopping season but a sustainable increase in real retail sales may signal an earlier start to holiday shopping this year to combat supply chain issues. However this positive data was buoyed by rising inflation and other ongoing market concerns. As millions of Americans prepare to drive home for the holidays, they will likely notice the price at the pump moving higher and higher. Energy prices have been a large contributor to the ongoing current inflationary environment, as the Consumer Price Index hit 6.2% year-over-year in October, with energy contributing 1.8 percentage points to the headline increase.
Stocks have a track record of posting positive returns in Thanksgiving week, which will potentially set the stage for the historic year-end rally. It is against this positive fundamental backdrop that Zurich Investments actively manage our range of funds, keeping a weather eye on emerging events that can contribute to market movements.