{"id":4944,"date":"2021-09-14T13:28:07","date_gmt":"2021-09-14T19:28:07","guid":{"rendered":"https:\/\/www.keystonefinancial.com\/?post_type=oi_article&p=4944"},"modified":"2021-09-14T13:28:09","modified_gmt":"2021-09-14T19:28:09","slug":"weekly-commentary-september-14-2021","status":"publish","type":"oi_article","link":"https:\/\/www.keystonefinancial.com\/articles\/weekly-commentary-september-14-2021","title":{"rendered":"Weekly Commentary | September 14, 2021"},"content":{"rendered":"\n
The Delta variant could take a toll on economic growth.<\/p>\n\n\n\n
There was some good news last week. The 7-day moving average of COVID-19 cases in the United States declined. The bad news was that the rate of infection remained about 99 percent higher than it was one year ago.<\/p>\n\n\n\n
As Delta variant infections surged across the United States, expectations for economic growth dropped more sharply than anticipated. Lisa Beilfuss of Barron\u2019s reported on changes to third-quarter forecasts for U.S. gross domestic product (GDP) growth.<\/p>\n\n\n\n
\u201cGoldman Sachs cut its forecast to 3.5% from 5.25%, Oxford Economics revised its call to 2.7% from 6.5%, and Morgan Stanley lowered its estimate to 2.9% from 6.5%. That\u2019s as the Atlanta Fed\u2019s GDPNow model predicts 3.7% for the quarter, down from 5.3% at the start of the month,\u201d Beilfuss wrote in Barron\u2019s.<\/p>\n\n\n\n
Economists aren\u2019t the only ones revising expectations. Some companies have cautioned that their revenue and earnings expectations were too high. Several airlines reported that cancellations have increased and ticket purchases have declined, which will impact the companies\u2019 financial performance. In addition, some manufacturers indicated that unresolved supply chain issues and the high cost of raw materials will affect their performance for the quarter, reported Yacob Reyes and Sam Ro of Axios.<\/p>\n\n\n\n
A chief investment officer cited by Axios said it\u2019s unlikely that many more companies will cut their revenue or earnings forecasts; however, \u201c\u2026he does expect fewer companies to announce better-than-expected earnings when they announce Q3 results.\u201d During the second quarter of 2021, 87 percent of companies in the Standard & Poor\u2019s 500 Index reported better-than-expected earnings.<\/p>\n\n\n\n
Last week, major U.S. stock indices trended lower, reported Al Root of Barron\u2019s. The yield on 10-year Treasuries also finished the week higher.<\/p>\n\n\n\n