What will the new year bring from an investing point of view? None of us has a crystal ball, of course, but we are confident that well-diversified clients are set up to face whatever the new year has in store for us.
Stocks backed away from record highs at the start of the week as expectations for higher interest rates took a particular toll on growth stocks and the technology-heavy Nasdaq Composite—which suffered its biggest weekly decline in nearly a year.
Global equity markets declined over the week ended December 17. Equities were dragged down as central banks announced their shift to tighten monetary policy, which soured investor sentiment.
The S&P 500 Index recorded its best weekly gain since February, as fears seemed to abate about the new omicron variant of the coronavirus.
The major indexes ended the week mixed as investors weighed on strong economic and profits data against inflation fears, ongoing supply strains, and a rise in coronavirus infections in some regions.
The major indexes ended the week mixed as investors weighed on strong economic and profits data against inflation fears, ongoing supply strains, and a rise in coronavirus infections in some regions.
The major indexes ended the week mixed as investors weighed on strong economic and profits data against inflation fears, ongoing supply strains, and a rise in coronavirus infections in some regions.
Stocks retreated from record highs, as investors confronted data showing the highest inflation in three decades. On Tuesday, the S&P 500 Index registered its first decline in nine sessions, ending its longest winning streak since 2017.
The S&P 500 index closed up 2 % this week. The Nasdaq 100 soared, up 3.21% which is 6.44% in the last two weeks! The charts are in an uptrend, and most of my indicators continue to point higher. All indexes closed at new highs, including the Russell. Semiconductors, airlines, home builders, hotels, all continued higher. Was this the sunrise for the next round of higher highs on Semiconductors? The ducks on the pond are all heading towards it! Looks similar to what the market did this week!
We still have some problems in the industrial commodities. They didn’t plummet, it is just that they badly underperformed the indexes. Big stuff like tech and discretionary continue to move higher. Options trading is soaring in total contracts as investors take large positions in TSLA, MSFT, FB, GOOGL. For some reason railroads and trucking rolled over while airlines turned up.
It’s not all easy out there. 84 stocks were down more than 15% on the week. Just when you think the water it safe, some significant portfolio damage shows up. I wrote a separate article on that on Saturday under the articles tab on the website.
Bond prices continued to rise this week and the bond price charts breaking out of a downtrend. An interesting chart is shown below where it looks as though the bond yields chart leads the stock market by 2-3 months. Will this signal a drop in the stock market to start the new year? The falling yields helped home builders and hurt financial stocks.
Currencies were mixed, but it looks like the Euro wants to rise. The Canadian Dollar was falling. Bitcoin made a nice move Sunday night.
Summary: Tech is going higher. Industrials also seem ready to move. Bitcoin is breaking out tonight. Commodities get more cautious. I like the gold trade setup.
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ClearWater Market Commentary as of January 14th, 2022
The large-cap indexes recorded their second consecutive weekly loss to start the year—and the technology-heavy Nasdaq Composite its third—as the unofficial start of earnings season began.