Q3 2021 Quarterly Market Commentary

Now Is Not the Time for Complacency & Greed

As we are writing this quarter’s commentary, equity markets are down approximately 5% from the all-time highs set during the third quarter. This decline is the worst since the first quarter of 2020 at the onset of the pandemic. In our opinion, investors have become accustomed to steadily increasing returns and we are concerned complacency is prevalent. Additionally, many client conversations about investment allocation include the desire to get more aggressive to try and earn higher returns. We believe now is not the time for complacency and greed.

Delta Variant Signals the Pandemic’s Continued Impact

The highly transmissible delta variant grabbed headlines during the third quarter. During July, the number of daily new confirmed Covid-19 cases started to unexpectedly spike as the delta variant spread. Covid case counts remained elevated during August before the growth rate of new cases gradually trended lower during September. The delta-driven fourth Covid wave in the U.S. occurred as the pace of vaccinations slowed and the percentage of fully vaccinated individuals fell below many foreign countries.

The official response to the fourth Covid wave differed considerably from prior Covid waves. Instead of returning to the strict lockdowns used early in the pandemic, public officials emphasized vaccinations and masking. While the change in approach blunted the delta variant’s economic impact, the economic recovery still encountered separate labor market and supply chain disruptions during the third quarter. Those disruptions, which remain, caused both Wall Street economists and the Federal Reserve to lower their GDP growth estimates for the remainder of 2021.

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Wells Fargo Advisors Financial Network did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The report herein is not a complete analysis of every material fact in respect to any company, industry or security. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Any market prices are only indications of market values and are subject to change. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request. CAR – 1021-00824

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