What happened this week
The East coast had a very unexpected week, on Friday morning a 4.8 magnitude earthquake occurred along a fault line in New Jersey, this was the strongest earthquake in NJ in over 200 years. There were no reports of significant damage, thankfully. Today we await a full solar eclipse, this a rare phenomenon, the last one occurring in 2017 for part of Central United States.
Gold looks ‘very vulnerable’ to a setback, veteran advisor says, after prices hit record high: Whilst we have continued to see new record highs in the stock markets, Gold (the “recession hedge”) has also continued to rise. Analysts comment this could be due to a longer term underperformance of the precious metal versus equity markets, whilst others speculate the rise in prices could be due to an underlying move by central banks (particularly Asian) to increase their asset allocation and gold reserves.
https://www.cnbc.com/2024/04/08/gold-prices-look-very-vulnerable-to-a-setback-strategist-says.html
Yellen says she won’t rule out possible tariffs on China’s green exports: The US has been expressing concerns about the oversupply of green energy exports, such as solar power, electric vehicles and lithium-ion batteries. Yellen spoke about how the US would like to work with China but is considering all measures including imposing tariffs to protect domestic industries.
Apple laying off 614 California workers after scrapping electric car project: Apple is laying off 614 workers after they have decided to abandon their efforts to build an electric car.
Surge in US small businesses started as side hustles: The number of new small businesses launched last year almost doubled those of 2022, analysts contribute this surge to the new hybrid/remote work style.
https://www.foxbusiness.com/economy/surge-small-businesses-started-side-hustles
Looking ahead to the rest of the week:
Wed April 10th: US Consumer Price Index
Wholesale Inventories
Thurs April 11th: Initial Jobless Claims
Producer Price Index
What happened this week
This morning all indices opened higher as the US consolidated its two presidential candidates after the results of Super Tuesday came in. Republican candidate Nikki Haley ended her presidential campaign ceding the GOP nomination to Donald Trump after losing every state except Vermont to Trump.
Microsoft launched a an AI tool last year and one of the company’s engineers came out speaking urgently about the disturbing findings he came across while test the AI tool at the end of last year. Jones raised concerns within the company and more publicly writing a letter to board members and also to US Senators. Jones cites concerns that the AI generator creates violent, sexual images and ignores copyrights. Most alarming is these images are create without any indication in the prompt. CNBC independently investigated and found, "The term “car accident,” with no other prompting, generated images of sexualized women next to violent depictions of car crashes, including one wearing lingerie and kneeling by a wrecked vehicle in lingerie and others of women in revealing clothing sitting atop beat-up cars.”
Concerns over AI deep-fake possibilities continue to grow, especially in the US election year as analysts fear an unprecedented amount of AI-generated election-related misinformation.
Private payrolls rose 140,000 for the month, up from the January numbers but missing the 150,000 estimate. Jerome Powell stated that he believes that if the economy continues on the current path, with job creation, inflation lowering etc he hopes that the US will begin to see interest rates come down.
Looking ahead to the rest of this week and into next:
Thurs March 7: Initial Jobless claims
US Productivity
Fri March 8: US Non farm payrolls
US Unemployment rate
Our March 12: Consumer Price Index
What happened this week
December capped off an incredible year end rally for the US equity markets. Throughout the month investors who had previously failed to commit, holding cash on the sidelines, rushed into the markets in a “FOMO” (Fear Of Missing Out) surge of new buying.
Comments from the Federal Reserve convinced markets that the inflation battle may have been won, and futures markets reflected hope that interest rate increases were ending, and the stage set for rate cuts hoped for in the run up to the November elections. Strong employment statistics and retail consumption through the holidays showed the US economy's resilience while Inflation and energy prices softened.
As we look to 2024, we believe that interest rates will stay steady, with no significant decline in the short or medium term. In fact, we may be in a short term high for Yields on longer-term government debt. We still see a flat-ish yield curve, possibly turning positive as the year progresses.
Equity markets may find this situation disappointing, and the chance for increased volatility and a series of up/down moves ahead of the elections will make equity markets risky.
The stock markets have continued to climb to new high in recent days, the S&P 500 entering into bull market territory; having risen more than 20% since its previous lower and as of Friday passing its previous high.
Tech stocks make up 28.9% of the index and it is this sector that is largely driving up the index to new highs. Apple, Microsoft and Amazon all up between 3-6% in the past five days, most surprisingly is Apple’s rally following three consecutive downgrades in the first week of January. Market analysts suspect a surge in trading from AI, non-discretionary buyers and tech sector momentum is continuing to drive Apple higher.
Across the US the presidential race is in full swing, Tuesday all eyes are on New Hampshire as Trump is aiming to drive his last remaining rival, Nikki Haley, to secure for himself the GOP nomination.
What happened this week
This weekend the Palestinian militant group, Hamas, launched an attack against Israel. There have been over 1,500 deaths recorded and many more injured. President Biden is expected to speak today on the unprecedented terror attacks and subsequent unfolding war.
Markets opened after the long weekend slightly higher, boosted by a drop in Treasury yields as investors sought a safe-haven whilst assessing the geo-political risks of the Israel-Hamas war. The US 10yr Treasury was down 8 bps to 4.694%.
Investors are waiting more quarterly results in the coming week; hoping for more insight ion company profit margins, consumer spending, inflation and the potential for continued high interest rates. Here’s who to look out for this week:
Tues: PepsiCo, Neogen Corp
Wed: Loop Industries, Wipro Limited, Samsung
Thurs: Delta Airlines, Infosys, Domino’s Pizza, Walgreens
Fri: JPM, PNC Financial Services, Citigroup, BlackRock, Wells Fargo, UnitedHealth Group
Samsung releases results on Wednesday and is expected to show a third quarter profit down 80% from a year earlier as the global chip manufacturer cites high inventory, low demand and rock-bottom prices for memory chips as the cause and expects to rebound as they have reduced inventory significantly.
Other economic data on the calendar for this week:
Tues: Wholesale Inventories
Wed: Core PPI, Minute of Fed’s September FOMC Meeting
Thurs: CPI, Initial Jobless Claims
Fri: Import Home Index, Consumer Sentiment
What happened this week
As we await market open in this last week of August, several companies are making big moves in the premarket;
Xpeng: US traded shares of the Chinese electric car maker are up nearly 5% after the company announced it will buy Didi’s smart electric car business worth$744 million.
Also Chinese stocks Alibaba and JD.com are up in the premarket after Chinese authorities said it would reduce a tax on trading to boost the stock market.
3M: is up 5% in early trading after Bloomberg announced that they tentatively resolved over 300,000 lawsuits related to their faulty earplugs, the company will pay more than $5.5 billion in settlements.
Boston Scientific is up 5.5% after Sunday the company announced positive results for a treatment for patients with atrial fibrillation.
The technology sector is in focus this morning, leading gains recovering from its poor performance up until now this year. Tesla is up 2.1% in premarket trading and chipmaker Nvidia is leading the charge after releasing a knock out earnings report.
Last Friday Fed Chair Jerome Powell spoke an encouraging tone at the annual central bank conference in Wyoming; he "pointed to some signs of continued economic growth and strong consumer spending, but indicated that the central bank would “proceed carefully” with additional hikes.” As of Monday morning, the markets seem to be pricing in a 20% chance that the Fed will again raise rates in their September meeting.
Looking ahead to this week:
Mon Aug 28th:
U.S. Commerce Secretary Gina Raimondo is visiting Shanghai and Beijing to discuss business relations between the U.S. and China; companies such as Intel have been competing for semiconductor dominance moving to make more chips domestically.
Tues Aug 29th:
9am: S&P Case-Shiller home price index
10am: July Job Openings
Consumer Confidence
Wed Aug 30th:
8:30am: GDP Q2 revision
US Trade Balance in goods
Retail inventories
Thurs Aug 31st:
8:30am Initial Jobless Claims
Personal Spending
PCE Index
Fri Sept 1st:
8:30am: US nonfarm payrolls
US unemployment rate
10am: ISM manufacturing
Construction Spending
What happened this week
Last Tuesday, Fitch officially announced that is was downgrading the United States’ long-term foreign currency issuer default rating from ‘AAA’ to ‘AA+’. The agency cited concerns of expected fiscal deterioration, rising deficits, and tightening by the Federal Reserve. US Treasury Secretary Janet Yellen, pushed back against the downgraded saying; "I strongly disagree with Fitch Ratings’ decision," Yellen's statement said. "The change by Fitch Ratings announced today is arbitrary and based on outdated data." "Fitch’s quantitative ratings model declined markedly between 2018 and 2020 – and yet Fitch is announcing its change now, despite the progress that we see in many of the indicators that Fitch relies on for its decision," she continued. "Many of these measures, including those related to governance, have shown improvement over the course of this Administration, with the passage of bipartisan legislation to address the debt limit, invest in infrastructure, and make other investments in America’s competitiveness.”
The US housing market affordability is at a record all time low, a report released by Redfin last Friday showed that the median home mortgage payment hit $2,605 in July, up 19% from a year ago. Thirty-seven states now require at least 30% of median annual income for new home payments. Experts in the housing sector cite the problem is primarily a supply issue not a demand issue, normally when interest rates areas high as they are buyer shy away and subsequently housing prices drop to compensate for the expensive interest rates, but not in the market.
Looking ahead to this week:
Mon Aug 7th: Tyson Food reports quarterly earnings
Tues Aug 8th: Duke Energy, Rivian, Lyft and UPS 9expected good earning after teaming up with Teamsters last month in a $30 billion contract)
Wed Aug 9th: Disney to report
Thurs Aug 10th: The Consumer Price Index for July is expected to show inflation moderating, with core inflation holding at 4.8%
Fri Aug 11th: The Producer Price Index is expected to rise 0.7% above the prior months 0.1%.
What happened this week
Minneapolis Fed President Neel Kashkari said on Monday that he cautioned against reading too much into a June pause in the current rate-hiking cycle.Markets currently are putting about an 83% probability that the FOMC will hold off on the 11th consecutive increase, the committee is set to meet June 13-14. “If we were to skip in June, that does not mean we’re done with our tightening cycle. It means to me we’re getting more information,” he said.
The world’s largest seven economies are meeting at a summit in Japan to discuss how to de-risk and diversify their supply chains away from China. De-risking refers to easing some of the dependencies on China, rather than totally breaking the relationship. Since the Corona virus pandemic and more recently the Ukrainian war there has been growing concern amongst western countries of economic coercion and intricacies of the supply chain reliance on China. The overall message from the summit sought to stress a De-risking strategy rather than a De-coupling; citing that isolating China would be impossible and dangerous.
JPMorgan this morning raised its net interest income by $7 billion this morning in an all-day investor presentation, following this announcement the spurred the financial’s highest earnings day stock bump in 20 years. JP Morgan emerged as one of the largest beneficiaries of the recent regional banking crisis; it was one of the only institutions which saw deposits rise as panicked investors looked for security in larger banks. Shares are up 1.3% on market open.
Apple shares fell on market open after being downgraded from, buy to hold by Loop Capital, who said Monday it expects Apple to fall short of June revenue expectations.
Meta has been fined a record 1.2 billion euros by European privacy regulators over the transfer of EU user data to the US. Meta used a mechanism called standard contractual clauses to transfer personal data in and out of the EU. Meta is contesting the fine.
What happened this week
Monday morning stock futures are largely unchanged as the markets anticipate another week of quarterly earnings. Last week Wells Fargo and Bank of America beat expectations despite recession fears and uncertainties in the banking sector.
Despite many market pessimists expecting a heavy earnings season; 90% of companies who reported in the first week topped EPS estimates. This week financial Bank of America, Goldman Sachs and Morgan Stanley report as well as Tesla, IBM and Netflix. Both M&T Bank and Charles Schwab beat profit estimates on market open.
In a CBS interwiew, Google and Alphabet CEO Sundar Pichai warned that “every product of every company” will be impacted by the quick development of AI and that “we need to adapt as a society for it,”. Scott Pellet of “60 minutes” commented that he was left “speechless’ and felt the new technologies left him feeling “unsettled”; Pelley also seemed concerned when Pichai said there is “a black box” with chatbots, where “you don’t fully understand” why or how it comes up with certain responses.
“You don’t fully understand how it works and yet you’ve turned it loose on society?” Pelley asked. The explosion of AI technology has lead to a number of academics, including Elon Musk and Steve Wozniak, to call off an immediate pause in training and experiments.
Merck & Co said on Sunday it will buy Prometheus Biosciences Inc for about $10.8 billion, picking up a promising experimental treatment for ulcerative colitis and Crohn's disease and building up its presence in immunology.
Looking ahead to this week:
Mon April 17: Home Builder Confidence Index
Tues April 18: Housing Starts
Wed April 19: Fed Beige Book
Thurs April 20: Initial Jobless Claims, Existing Home Sales
Fri April 21: US Service PMI
What happened this week
https://capture.dropbox.com/Cu07MxdccPuSYWiX
In the tech sector; Chinese Foreign Minister is trying to persuade Japan not to support the US’s curbs on China’s semiconductor industry. The US has been trying to rally key players in the supply chain for China’s semiconductor industry, in order to chip export restrictions. Japan announced on Friday new export restrictions on 23 types of semiconductor manufacturing equipment, but did not specifically name China.
A group of Democratic lawmakers are defending TikTok amid efforts to ban the Chinese-owned platform. Lawmakers have been critical of the app; claiming that it is trying to divide the American people by pushing pro-CCP narratives. The Chinese parent company, ByteDance, is required by Chinese law to make the app’s data available to the CCP.
Looking ahead to this week:
Mon April 3rd: Construction Spending
Tues April 4th: Factory Orders
Wed April 5th: US Trade Balance
Thurs April 6th: Initial Jobless Claims
Fri April 7th: US Unemployment rate
What happened this week
March has been a tumultuous month for the banking sector. On March 10 a classic bank run lead to the collapse of Silicon Valley Bank, US regulators intervened to take control, the consequences have been seen globally. A week later US regional bank, Signature Bank, was shut down, then a third US bank First Republic Bank. This past week saw the collapse of Credit Suisse, with UBS, Switzerland’s largest bank, swooping in with an emergency rescue deal announced Sunday evening.
In the US there has been nearly $200 billion in direct central bank support, guaranteeing all the deposits at Silicon Valley Bank and Signature Bank the US Federal Reserve has committed $140 billion. The Swiss National Bank similarly offered Credit Suisse an emergency loan for $54 billion.
The question now remains, what next, where are the markets heading? The stress placed on banks and the financial sector will likely have consequences on the consumer, we will likely see credit become more expensive and less available. Goldman Sachs analysts say the American economy has a 35% chance of entering a recession in the next 12 months. The world’s second-largest economy, China, is also reacting to this month’s events, the Chinese Central Bank cut minimum reserve requirements for lenders in an attempt to keep cash flowing through their economy.
Stock markets are expected to open flat on Monday morning as investors assess the events of the weekend, and anticipate the next Interest Rate decisions by the Fed on Wednesday. Investors are split in opinion as to whether the Fed will pause rate hikes or raise by a quarter point, most analysts believe that the possibility of a half point rise in rates is gone.
Looking ahead to this week:
Tues Mar 21: Existing Home Sales
Wed Mar 22: FED INTEREST RATE DECISION
Thurs Mar 23: Initial Jobless Claims, New Home Sales
Fri Mar 24: Durable Goods
What happened this week
Friday markets dropped more than 1% in a drastic sell off and Monday’s futures are following the same tone, as markets expect to open some 150 points lower. Friday afternoon the Federal Deposit Insurance Corp. took control of tech-focused lender, Silicon Valley Bank, following a run on deposits which collapsed the bank. The rapid demise of SVB started mid week when the lender was forced to take a big loss on bond holdings in order to free up liquidity for customer withdrawals. After announcing a nearly $2 billion loss selling assets, tech clients of the lender rushed to pull their deposits, and the share price nosedived sealing the fate of SVB. The FDIC has said that SVB depositors will have access to their money starting today, Monday. But the wider market consequences have already started to take affect, bank stocks and financials are all lower in the pre market, First Republic leading the decline, down more than 60%.
Rivian wants out of its exclusive agreement with Amazon for the EV maker’s electric delivery trucks. Rivian last month touted 10 million packages delivered via the Amazon vans. The EV maker is ramping up production of the vans and its R1 series vehicles, and is also in need of cash. Rivian and Amazon struck a deal in 2019 to hand over 100,000 electric trucks to the e-commerce giant. Amazon began delivering packages with the vehicles in July, and Rivian last month touted 10 million packages delivered via the vans.
Looking ahead to this week:
Tues Mar 14th: Consumer Price Index
Wed Mar 15th: Retail Sales, Producer Price Index
Thurs Mar 16th: Housing Starts, Building Permits
Fri Mar 17th: Industrial Production, US Leading Economic Index
What happened this week
Federal Reserve Chairman Jerome Powell spoke on Tuesday warning that interest rates are likely to continue to rise higher than expected previously. “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in remarks. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.” These remarks left the markets with two impressions; one that the level of fed funds rate hike it likely to be higher than previously indicated and two that the previous, smaller quarter point hike will be short lived. Powell went on to say that the recent economic data showed the the Fed’ s inflation-fighting job is not over yet.
As a consequence markets began a big sell off Tuesday morning, with the Dow dropping 400 points, S&P down 1.2% and the Nasdaq down 1%.
In other news; for the first time in seven years the US has a new nuclear reactor. Georgia Power announced that the Volte nuclear reactor unit 3 has started a nuclear reaction inside the reactor. In a written announcement from from Georgia Power, they company has said that the reactor is in “initial criticality” when the nuclear fission process starts splitting atoms and generating heat; this heat causes water to boil and steam spins a turbine that’s connected to a generator that creates electricity. “This is a truly exciting time as we prepare to bring online a new nuclear unit that will serve our state with clean and emission-free energy for the next 60 to 80 years,” Chris Womack, CEO of Georgia Power, said.
Jamie Dimon, CEO of Morgan Stanley spoke on Monday of his biggest economic concerns; citing the war in Ukraine and the US relationship with China.
Alaska is awaiting President Biden’s decision on a major oil and natural gas development project. The state’s labor union is hoping for the President to approve the plan to build a sustainable “climate future”. The proposal by ConocoPhillips aims to develop energy resources in a small portion of what’s known as the National Petroleum Reserve-Alaska on Alaska’s North Slope. If the project is denied Biden America will likely continue to import oil from Venezuela and the Middle East.
Looking ahead to this week:
Wed March 8th: ADP Unemployment, US Trade Balance
Thurs Mar 9th: Jobless Claims
Fri Mar 10th: Employment report, US Unemployment Rate, Federal Budget
What happened this week
The stock markets opened higher on Monday morning, in the hopes of recovering some of the losses from the worst week 2023 so far. The markets suffered last week primarily in the wake of higher than expected Personal Consumption Expenditures (PCE)- which is the Fed’s preferred gauge on inflation. Investors continue to be cautious of the interest rate hikes, as the Federal Reserve raises interest rates to the highest level in 40 years.
The two top US retailers issued cautious U.S. consumer outlooks for 2023 last week, Walmart said consumer spending would start the year strong, but fade and Home Depot expects revenue to be flat this year, but bolstered by home equity. Retailers are struggling with labor shortages; Home Depot said it would spend $1 billion to boost compensation for its hourly, front-line workers. Similarly retailers seem to be continuing to make longer-term capital investments as orders placed with US factories for business equipment increased in January by the most in 5 months.
Looking ahead to this week:
Monday Feb 27: Durable Goods Orders
Tues Feb 28: Advanced Retail Inventories; Consumer Confidence
Wed Mar 1: Construction Spending
Thurs Mar 2: Initial Jobless Claims, Productivity (revision)
Fri Mar 3: ISM Services
What happened this week
Markets opened the week higher in anticipation of a busy week ahead for economic data and perhaps in an attempt to offset some of the losses suffered last week. Last week’s losses were largest due to Fed Reserve Chairman, Jerome Powell, commenting that there is still a long way to go in the fight against inflation.
Logistics managers warn of increased supply chain prices which will trickle down to affect CPI numbers expected later this week. Whilst factors which previously held the greatest impact on supply chain inflation, such as ocean freight rates and transportation fuels, have dropped, lack of consumer demand has left a backlog of inventories which are expected to drives rates higher.
The US military shot down the fourth unidentified flying object over the state of Michigan on Sunday. Senate Majority Leader Chuck Schumer told ABC’s “This Week” Sunday that officials now believe both objects were balloons that were much smaller than the initial spy balloon which the military shot down Feb 4.
Looking ahead to this week:
Tues Feb 14th: Consumer Price Index
Wed Feb 15th: Retail Sales, Industrial Production Index, Business Inventories.
Thurs Feb 16th: Initial Jobless Claims, Producer Price Index, Building Permits and Housing Starts
Fri Feb 17th: Import Price Index
What happened this week
Stocks opened lower this morning as traders are preparing for a busy week of company reporting. About 20% of the S&P 500 will report earnings this week, including McDonald’s and General Motors on Tuesday followed by tech giants Apple, Meta Platforms, Amazon and Alphabet later in the week.
Also this week the Fed will be meeting both Tuesday and Wednesday and another rates hike is expected Wednesday, although the markets are hoping for only a 0.25 point rise this month.
Looking ahead to this week:
Tues Jan 31st: S&P Case Shiller Home Price Index
Consumer Confidence Index
Wed Feb 1st: Fed Funds Rate Decision
Motor Vehicle Sales
ADP Employment Rate
Thurs Feb 2nd: Jobless Claims
Factory Orders
Fri Feb 3rd: Non Farm Payrolls
Unemployment Rate
What happened this week
Stocks opened Monday morning slightly higher, as investors hope for a slowing of rates hikes by the Fed. This comes after last Friday’s press conference with Fed Governor, Chris Wallace, where he indicated only a quarter point rate hike at the Fed’s next meeting. Investors took this as good news showing the potential end of the rate hiking cycle and even the potential for cuts further down the line.
This week continues the earnings reports, with almost 40% of the Dow Companies schedule to release earnings results this week:
Tues: Johnson & Johnson, GE, Lockheed Martin, Verizon, Microsoft
Wed: AT&T, Boeing, Tesla, IBM
Thurs: Comcast, Southwest Airlines, American Airlines, JetBlue, Intel
Goldman Sachs announced this week a massive cut to its Alternative Investments which negatively impacted results this quarter, their fourth quarter earnings missed expectations by a significant margin. The bank also is in the process of firing 3,000 employees, in the largest round of layoffs since the 2008 financial crisis.
Looking ahead to this week:
Mon Jan 23: Leading economic Indicators
Tues Jan 24: S&P US Manufacturing PMI
Thurs Jan 26: Initial Jobless claims, Real GDP first estimate, Durable Goods, New Home Sales
Fri Jan 27: Real consumer spending, PCE Price Index
What happened this week
All the major averages opened the year on a positive note last week, with the Dow and S&P posting their best week since November. The Dow on Friday soared more than 700 points, or 2.13%, after a positive December jobs report showed signs that inflation may be easing. Non-farm payrolls came in slightly higher than expected, but wages increased at a slower pace than expected, this coupled with data showing a contraction in the services sector, lead economists and investors to hope the central bank’s rate hikes are accomplishing their goal. Many market analysts have commented that the markets will have an increased focus on labor data for 2023, Wells Fargo analyst commenting, "The monthly jobs report will be the ‘new CPI.’ This year, labor data is “setting the tone for marginal swings (either hawkish or dovish) in Fed perceptions.”
The U.S. House of Representatives elected Kevin McCarthy of California as speaker in the 15th round of votes early Saturday. McCarthy had to make several concessions to win after the weeklong battle. McCarthy pledged a conservative, America-first agenda, tackling the immigration crisis at the Mexican border, cutting back funding at the IRS and fixing “woke indoctrination in our schools.”
On Sunday rioters ransacked Brazil’s three branches of power as part of a failed attempt to overthrow President Luiz Inácio Lula da Silva. Brazil’s security forces have regained control of the country’s political institutions and Brasilia governor Ibaneis Rocha said more than 400 people had been arrested. Lula made a surprising return to Brazil’s presidency late last year, securing 50.9% of the vote to defeat far-right incumbent Bolsonaro, many of Bolsonaro’s supporters refused to accept the result.
Looking ahead to the week:
Mon Jan 9th: NY Fed 1yr and 5 yr inflation expectations.
Thurs Jan 12th: CPI for Dec, Initial and Continuing Jobless Claims
Fri Jan 13th: Import Price Index
What happened this weeK
Friday was the final day of trading in a painful year for stocks. All three of the major averages suffered their worst year since 2008 and broke a three year winning streak. The Dow fared the best of the indexes in 2022, down about 8.8%, the S&P 500 dropped 19.4%, while the tech-heavy Nasdaq sank 33.1%.
2022 certainly was a difficult year; record high inflation, aggressive rate hikes from the Federal Reserve, growth and technology stocks hit the hardest in the markets, geopolitical concerns, Covid and the invasion of Ukraine.
However, despite the year’s overall losses both the Dow and S&P500 were up in Q4, perhaps a light a the end of a very dark tunnel.
Friday was the final trading day of the 2022, but also for the quarter, month and year. Here’s how the major market averages fared over those time frames.
The Dow finished:
down 8.78% for the year
up 15.39% for the quarter
down 4.17% for the month
down 0.17% for the week
The S&P 500 finished:
down 19.44% for the year
up 7.08% for the quarter
down 5.90% for the month
down 0.14% for the week
The Nasdaq Composite finished:
down 33.10% for the year
down 1.03% for the quarter
down 8.73% for the month
down 0.30% for the week
The Russell 2000 small caps finished:
down 21.56% for the year
up 5.8% for the quarter
down 6.64% for the month
up 0.02% for the week
Cited from cnbc.com
Looking ahead to this week and the start of 2023:
Tues Jan 3rd: S&P US Manufacturing PMI
Wed Jan 4th: Job Openings and FOMC Minutes
Thurs Jan 5th: Initial Jobless Claims and Trade Deficit
Fri Jan 6th: Dec Unemployment Rate and Factory Orders
Wishing everyone a Happy New Year!
What happened this weeK
Market futures are slightly higher this morning as we enter the final two weeks of the year. Investors and economists alike are hoping for a boom in retail spending for the holidays despite constant inflation and recession fears. Last week the Federal Reserve announced another 50 basis point rate hike and continued to signal higher-for-longer rates. Recession fears grew because the central bank reconfirmed its forecast for future hikes above previous expectations, saying that it now expects to hike rates to 5.1%. Economists are now speculating and managing expectations for the new year expressing that the market volatility experienced in 2022 will continue into the new year.
Here is a recap of where major indices stand as we enter the final weeks of 2022:
Dow Jones Industrial Average:
Down 4.83% for December
10.91% off its record high
Down 9.41% for the year
S&P 500
Down 5.58% this month
Sits 20.05% off its record highs
Down 19.17% for 2022
Nasdaq Composite:
Down 6.65% this month
32.68% off its highs
Down 31.57% for the year
(Cite: cnbc.com)
In other news, Elon Musk polled himself as CEO of Twitter and a surprising major of Twitter users voted for him to step down as CEO, this comes after a tumultuous two months after acquisition in which Musk has made some unpopular layoffs and reinstating previous closed account, like former President Donald Trump.
Looking ahead to this week:
Tues Dec 20th: Building Permits and Housing Starts.
Wed Dec 21st: Consumer Confidence
Thurs Dec 22nd: Real GDP Revision and Jobless Claims
Fri Dec 23rd: PCE Index, Durable goods, UMich 5 yr Inflation expectations.
Wishing you all a very Merry Christmas and Happy New Year!
What happened this week
U.S. stock futures are fractionally higher early Monday, this is a complicated week for investors as the markets await several events in the fight against inflation and anticipate the outlook for 2023. On Tuesday, the November consumer price index will be released, and traders will be looking for a sign that inflation is slowing. Also on Tuesday the Federal Reserve has a two-day meeting starting. The central bank is expected to announce another rate hike on Wednesday, however it is widely expected to be 50bp a milder hike in comparison to the previous moves by the Fed. Citi Global Wealth Management speculated over the weekend that the U.S. will likely tumble into a "mild" recession next year that sees unemployment top 5%. The group said that the economy could lose an estimated 2 million jobs in 2023 pushing the jobless rate to 5.25%. The Federal Reserve has been raising interest rates at the most aggressive pace since the 1980s trying to fight inflation, they already have approved six straight rate hikes.
Americans who made money online this year will face new challenges when they file their taxes in 2023, beginning next year, taxpayers must report to the IRS transactions of at least $600 that are received through payment apps like Venmo, PayPal and Cash App. Previously small businesses had a $20,000 threshold for reporting to the IRS but now a single transaction over $600 will trigger the tax form. The change is intended to crack down on Americans evading taxes by not reporting their full income. Roughly one in four Americans take in extra income on the side by selling something online, renting their home or using a digital platform to do work, all of which will now come under taxation.
Looking ahead at this week:
Mon Dec 12th: NY Fed 1yr and 5yr Inflation Expectations
Tues Dec 13th: Nov CPI
Wed Dec 14th: FED FUNDS RATE ANNOUNCEMENT
Jerome Powell Press Conference
Thurs Dec 15th: Initial Jobless Claims, Retail Sales, Industrial Production Index
Fri Dec 16th: S&P US Manufacturing PMI