Kabul notwithstanding, there were two events that moved markets last week:

* On Monday, the FDA gave official approval for Pfizer’s covid-19 vaccine. In response to this development, many companies and government agencies announced vaccine mandates, a step that should help raise vaccination rates nationally and reduce the spread of the virus.

* On Friday, Fed Chairman Jerome Powell successfully walked the line in his Jackson Hole speech, acknowledging that progress had been made towards full employment, expressing the view that longer-term inflation risks are manageable, teeing up asset purchase tapering to begin later this year, and underscoring that tapering does not start a ticking clock on a rate hiking cycle.

Stock investors responded favorably. Cyclicals and small/mid caps led the rally, while the S&P 500 and Nasdaq both finished the week at record highs. Notably, this was the 52nd record closing high in the S&P 500 so far in 2021.

International stocks were better as well, led by a rebound in China following the eradication of local virus transmission after a month of lockdowns.

Treasury yields finished higher on the week, although they retraced part of this move after Jerome Powell’s speech on Friday. Credit spreads tightened.

Oil was a major beneficiary of the cyclical rally, closing higher by nearly $6.50 on the week. Other commodities were higher as well. The US dollar weakened.