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Third Quarter 2021 Executive Summary

Quarterly Executive Summary

Keep your face always toward the sunshine – and shadows will fall behind you. Walt Whitman

After more than a year of rapid recovery, the U.S. economy saw decelerating growth in the third quarter, with a spike in Covid cases and inflation fears pushing consumer confidence to a seven-month low.  We see this as a temporary slowdown in a remarkably resilient economic recovery and expect healthy growth at a moderate pace for the remainder of the year and into 2022.

U.S. stock markets closed out the quarter relatively flat, with September (historically Wall Street’s worst month of the year) wiping away much of the quarter’s earlier gains.  This follows a series of all-time highs in Q2, and given the daily headlines and political twists and turns (yet another COVID variant, the debt ceiling/potential government shutdown, supply-chain bottlenecks, rising prices …), we saw markets hang tight. 

Fundamentals remain strong.  Earnings are increasing and expected to climb higher yet in 2022.  Unemployment continues to fall.  And the Fed has pledged its continued full support.  Yes, inflation is up, but we expect that to subside as supply chain issues and shortages related to the reopening of the economy subside.  These are unique times for sure, and as we indicated last quarter, we continue to anticipate some headwinds, but overall, we expect continued growth, albeit at a more moderate rate. 

As always, it’s steady as she goes.  We continue to focus on fundamentals and adhere to a disciplined, long-term investment strategy.  And, as always, we are here for you.  As 2021 winds to a close, a kinder, gentler year than the one before, we count our blessings -- friends, family, health … and the gift of serving YOU.  For all of this, we are grateful.  Have a healthy and prosperous ending to the year and a happy holiday season.  And keep your face toward the sunshine!        

Recent Economic Data: 

Gross Domestic Product (GDP).  The GDPNow model estimate for real GDP growth in the third quarter of 2021 is expected to slow to 1.2% (seasonally adjusted annual rate) amid supply constraints and inflation worries (estimate released 10/15/2021).  Real GDP increased at an annual rate of 6.7% in Q2 2021 (estimate released 09/30/2021).  

Unemployment.  The September unemployment rate was 4.8%, down from 5.9% in June, but still higher than the pre-pandemic level of 3.5% in February 2020.  

Consumer Confidence.  The Conference Board Consumer Confidence Index, an indication of consumer attitudes and buying intentions, declined in September for the third consecutive month as concerns over the spread of the COVID Delta variant weighed on consumers’ outlook.   The Index now stands at 109.3, down from 127.3 in June (1985=100).

Consumer Price Index (CPI).  The CPI for All Urban Consumers (CPI-U), a measure of inflation which shows “cost of living” fluctuations, rose 0.3% in August, on a seasonally adjusted basis.   For 12 months ending August, the CPI-U increased 5.3% before seasonal adjustments. 

Earnings.  For Q3 2021, the estimated earnings growth rate for the S&P is 27.6%, which would mark the third highest (year-over-year) earnings growth rate reported by the index since 2010.    

Housing.  Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,615,000, 3.9% above the revised July estimate and 17.4% above the August 2020 rate.   Demand and home sales remain strong, and despite supply chain disruptions and labor shortages, builder confidence rose in September. 


September 30, 2021

Q3 Return







S&P 500




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The views expressed represent the opinion of Asset Management Financial Solutions, Inc. (“AMFS”) and are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and AMFS’s view as of the time of these statements.  Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties.