The Markets (as of market close December 10, 2021)

Stocks closed last week higher for the first time in three weeks. The S&P 500 enjoyed its best weekly gain since February. Fears over the effects of the Omicron variant on economic growth seemed to subside somewhat as each of the benchmark indexes recorded notable gains. Information technology drove much of the rally, advancing 6.0% last week. Markets also seemed to react to favorable economic news. Weekly unemployment claims were the lowest since 1969, while the number of new jobs available rose to 11.0 million. Inflation rose again, but in line with expectations, reinforcing the premise that the Federal Reserve will accelerate the tapering of its bond purchases. The Dow posted the largest weekly gain, followed by the S&P 500, the Nasdaq, the Global Dow, and the Russell 2000. Treasury yields and crude oil prices advanced, while the dollar and gold prices dipped.

Investors turned more bullish last Monday following a stretch of volatility sparked by concerns over the spread of the Omicron variant. 

And last Tuesday, Wall Street staged the biggest rally since March on hopes that the Omicron variant won’t weaken the economy. Tech stocks, which had been floundering, led the charge, pushing the Nasdaq up 3.0%, followed by the Russell 2000 (2.3%), the S&P 500 (2.1%), the Global Dow (1.6%), and the Dow (1.4%). Each of the market sectors advanced, led by information technology, consumer discretionary, and energy. Ten-year Treasury yields climbed to 1.48%. Crude oil prices rose to $71.54 per barrel. The dollar was unchanged.

Stocks continued to push higher last Wednesday as the S&P 500 and the Nasdaq inched toward record highs, but the three-day stock market rally ended last Thursday as losses in consumer discretionary, information technology, and real estate led the market lower. The volatile Russell 2000 dropped the furthest, down 2.3%, followed by the Nasdaq (-1.7%), the S&P 500 (-0.7%), and the Global Dow (-0.4). The Dow was little changed. Bond prices rose, pulling yields lower. Crude oil prices fell to $70.49 per barrel. The dollar inched higher. Among the market sectors, only health care and consumer staples posted gains.

Equities closed out the week on a high note last Friday. Major benchmark indexes posted solid gains, led by the S&P 500 (1.0%), followed by the Nasdaq (0.7%), the Dow (0.6%), and the Global Dow (0.3%). The Russell 2000 dipped 0.4%. Ten-year Treasury yields inched higher, while crude oil prices rose 1.5% to $71.97 per barrel. The dollar slipped lower. Many market sectors rose, with information technology, consumer staples, and energy leading the way.

Eye on the Week Ahead

The Federal Open Market Committee meets this week. Based on “hawkish” statements from Fed Chair Jerome Powell and other members, it is likely the Committee will further accelerate the tapering of its asset purchases. It is also possible that the timetable for raising interest rates could be moved up to mid-2022.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.