Winthrop Partners Market & Economic Update 1-10-22

The Markets (as of market close January 7, 2022)

After beginning the week on a high note, stocks couldn’t maintain that momentum, ending the week in the red. Following a record close on Monday, the S&P 500 ended the week down 1.9%, the worst start to a year since 2016. Some investors may be concerned that the Federal Reserve will raise interest rates faster than had been anticipated. The Nasdaq fell 4.5%, its worst week since February 2021. Treasury yields continued to mount in anticipation of higher interest rates. While the December employment report showed a slightly underwhelming 199,000 new jobs added, the unemployment rate fell to a pandemic-era low of 3.9%, possibly adding further fodder for the Fed to continue its hawkish bent.

Wall Street kicked off the start of 2022 in fine fashion, recording record highs last Monday. The Nasdaq and the Russell 2000 climbed 1.2%. The large caps of the Dow (0.7%) and the S&P 500 (0.6%) advanced, while the Global Dow added 0.6%. Bond prices dipped, possibly in anticipation of rising interest rates, sending 10-year Treasury yields up to 1.62%. Crude oil prices rose $76.07 per barrel, while the dollar gained 0.7%. Energy (3.1%) and consumer discretionary (2.8%) led the market sectors, while materials, real estate, and health care fell. The risk rally sent gold prices down nearly 1.5% to $1,801.90 per ounce.

Stocks were mixed last Tuesday, with the Dow reaching its second record high in 2022, while a tech rout pulled the Nasdaq down 1.3%. The Russell 2000 and the Global Dow each gained more than 1.0% on the day, while the S&P 500 was little changed. Ten-year Treasury yields jumped to 1.66%, crude oil prices rose for the second consecutive day to close at $77.00 per barrel, while the dollar stalemated. Energy, financials, and industrials climbed higher, while information technology and health care trended lower.

Equities fell last Wednesday following the release of the minutes from the Federal Reserve meeting, raising the prospect for multiple interest-rate hikes beginning in the near term. The Nasdaq and the Russell 2000 each dropped 3.3%. The S&P 500 fell 1.9%. The Dow dipped 1.1%. Ten-year Treasury yields continued to rise, closing at 1.7% as bond prices fell. Crude oil prices rose marginally to close at $77.19 per barrel. The dollar was little changed. Each of the market sectors lost value, with the biggest declines hitting information technology, real estate, communication services, and consumer discretionary.

Stocks continued to trend lower last Thursday, with only the Russell 2000 advancing by the close of trading. The Dow fell 0.5% and the Global Dow dipped 0.4%. The Nasdaq and the S&P 500 were flat. Ten-year Treasury yields rose again, climbing to 1.73%. Crude oil prices were approaching $80.00 per barrel, while the dollar was unchanged. Energy and financials advanced, while health care and materials declined.

Equities couldn’t reverse course last Friday, closing the day in the red. The Russell 2000 fell 1.1%, followed by the Nasdaq (-1.0%), and the S&P 500 (-0.4%). The Dow was flat, while the Global Dow gained 0.7%. The dollar and crude oil prices fell, while 10-year Treasury yields continued to climb higher, jumping 3.8 basis points. Among the market sectors, energy, financials, and utilities advanced, while information technology and consumer discretionary fell more than 1.0%. Click here for full article:Winthrop Partners Market and Economic Update 1-10-22