The S&P 500 had its worst week since June, down 1.7%. The Dow and Nasdaq declined as well, down 2.2% and 1.6%, respectively. Primary reasons for the decline was over inflationary pressures and the Federal Reserve’s plan to pull back on bond purchases later.  The elephant in the room was the delta variant. A new U.S. government study found unvaccinated people are 11 times more likely to die of Covid-19 as the delta variant continues to kill thousands of them daily.

Given the backdrop, is it an opportunity to buy or time to sell stocks?

Future Wealth’s View

As the saying goes “one swallow doesn’t make a summer”. We, at Future Wealth, believe the Federal Reserve will want to see further labor market gains in the months ahead before it starts paring its pace of asset purchases. We also see a number of forces aligning that should spur a strong upswing in U.S. employment in the coming months.

The delta variant, while being unpredictable in terms of the damage it could cause, is one that could ultimately be controlled by increased vaccination rates. Biden’s mandate to vaccinate should, over time, control the proliferation of the delta variant and Covid in America. In the meantime, the economy is humming, consumers continue to spend and the unemployment rate has plummeted down to 5.2% as corporate earnings swell. In summary, fundamentals of the economy have not changed.

Our recommendation to investors is simple – Buy on the dip that the market has provided this week. You may not get too many chances at these levels in the future.