Winthrop Partners Market and Economic Update for 1-31-22

The Markets (as of market close January 28, 2022)

A very turbulent week, marked by volatility, ended with a robust finish. Last Friday’s gains were enough to push several of the benchmark indexes higher by the end of the week. The Dow advanced 1.3% and the S&P 500 gained 0.8%. A late-week tech rally was enough to move the Nasdaq back to where it began the week. Crude oil prices advanced for the sixth straight week, with prices reaching a nearly seven-year high. With supplies remaining limited, more projections are pointing to a return to $100.00 per barrel. Ten-year Treasury yields have risen 27 basis points since the beginning of January, while the dollar moved 1.7% higher. Gold prices, which had been gaining ground, fell back last week. Fourth-quarter corporate earnings have been generally favorable, with about 80% of the companies that have reported earnings so far this season beating projections.

Dip buyers and bargain hunters helped push the market indexes generally higher last Monday. After beginning the day well in the red, the Nasdaq was able to climb 0.6%, while the Dow and the S&P 500 each gained 0.3%. The Russell 2000 (-1.8%) and the Global Dow (-1.2%) failed to gain ground. Ten-year Treasury yields and crude oil prices declined, while the dollar gained a quarter of a percent. Most of the market sectors ended the day higher, led by consumer discretionary, which advanced 1.3%. Utilities, health care, and consumer staples ended the day lower.

Stocks were unable to maintain any momentum from the prior day, as each of the benchmark indexes fell last Tuesday. The Nasdaq led the downturn, dipping 2.3%, followed by the Russell 2000 (-1.4%), the S&P 500 (-1.2%), and the Dow (-0.2%). The Global Dow inched 0.2% higher. Investors apparently remained edgy as they awaited the Wednesday statement following the Federal Reserve’s meeting. Corporate earnings data for the fourth-quarter of 2021 has not been quite as robust compared to the third quarter, although several major companies posted returns that beat projections. Ten-year Treasuries rose five basis points to close at 1.78%. Crude oil prices climbed 2.3% to $85.23 per barrel. The dollar was little changed on the day.

Last Wednesday, Wall Street reacted to the expected Federal Reserve announcement (see below) with mixed results. The Dow slid 0.4%, the Russell 2000 fell 1.3%, and the S&P 500 dipped 0.2%. The Nasdaq closed relatively unchanged. Among the market sectors, only financials and information technology gained ground, while materials and real estate each fell more than 1.0%. Ten-year Treasury yields added more than seven basis points to close at 1.85%. The dollar and crude oil prices also advanced on the day.

Despite last Thursday’s upbeat fourth-quarter gross domestic product (see below), stocks couldn’t hold on to gains from earlier in the day, ultimately closing in the red. The Russell 2000 continued to dive lower, ending the day down 2.3%, followed by the Nasdaq (-1.4%), the Global Dow (-0.6%), and the S&P 500 (-0.5%). The Dow was flat by the end of Thursday’s trading. Ten-year Treasury yields dipped 4 basis points, crude oil prices slid minimally, while the dollar advanced 0.9%.

Stocks roared back last Friday with the best day since June 2020. Strong fourth-quarter earnings reports from some major corporations may have lured dip buyers, at least for the day. The Nasdaq jumped 3.1%, followed by the S&P 500 (2.4%), the Russell 2000 (1.9%), the Dow (1.7%), and the Global Dow (0.5%). Gains in the market sectors were widespread, with only energy losing ground. Information technology jumped 4.3%, real estate gained 3.4%, and communication services advanced 2.9%. Crude oil prices climbed to $87.23 per barrel. Ten-year Treasuries and the dollar fell. click here for entire article:  Winthrop Partners Market and Economic update 1-31-22