The last week of 2021 ended with modest gains in most indices but the Nasdaq 100 virtually flat on low trading volume.
As we start 2022, traders will focus on Q4 earnings reports coming out later in January. Forecast are for strong Q4 earnings and this will be necessary to sustain an upward trend in stocks. While the Omicron variant cases are spreading rapidly, it appears have a much lower percentage of severe cases than Delta. South Africa is reporting that new cases are now falling as rapidly as they rose a few weeks ago. Hopefully, this variant will have smaller effect on growth in the first quarter than past variants.
Mexico’s central bank plans to issue it’s own digital currency by 2024 and has raised concerns about cryptocurrency risks. The Switzerland-based Bank for International Settlements said that a survey of global central banks showed 86% are researching the potential for central-bank digital currencies and 14% had pilot projects in operation.
Treasury yields were mixed with the 30-year bond yield down slightly at 1.906% and the 10-Year note closing up at 1.514%. Crude oil rose to $75.45 a barrel and natural gas fell to $3.589 per MMBTUs. The U.S. dollar index fell to 95.67 and gold rose to $1830.50 an ounce.
In the economic numbers:
- The S&P CoreLogic Case-Shiller National Home Price Index for October showed home prices rose 19.1% from last October. This was down from 19.7% year over year in September.
- The Labor Department reported :
- First time claims for unemployment were 198,000 down from the prior week’s revised 205,000.
- The 4-week moving average of claims, designed to smooth out volatility, fell to 199,250, the lowest since October 1969.
- Continuing claims fell to 1.7MM in the week ending December 18th.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude oil increased from 11.6MM BPD to 11.8MM BPD.
- Natural gas storage fell 136BN cubic feet and is about at 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs was unchanged at 480. The number of active natural gas rigs was unchanged at 106.
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Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus President & C.E.O.
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.