The Markets (as of market close December 23, 2021)

Wall Street closed the holiday-shortened week at record levels as investors seemed to speculate that the economic recovery could weather the growing number of coronavirus cases. The S&P 500 closed the week at a record high. The Nasdaq and the Russell 2000 ended up over 3.0%. Ten-year Treasury yields, gold, and crude oil prices climbed higher, while the dollar dipped lower. The market sectors were mixed, with consumer discretionary, communication services, and information technology leading the gainers.

Stocks slid last Monday. Fears that the Omicron variant could undercut the economic rebound, coupled with a setback to President Joe Biden’s social-spending bill, was enough to send stocks reeling. Each of the major benchmark indexes fell by at least 1.0%, with the small caps of the Russell 2000 dipping 1.6% to lead the declines. Ten-year Treasury yields inched higher, while the dollar and crude oil prices fell.

Equities jumped higher last Tuesday, reversing course from what had been the biggest three-day drop since September. While the Omicron variant continued to rage around the world, the White House indicated that widespread lockdowns were not anticipated and suggested that any negative impact of the latest virus strain on economic activity would be relatively short and shallow. The Russell 2000 and the Nasdaq each gained more than 2.0%, while the remaining benchmark indexes advanced by at least 1.6%.

Wall Street ended last Wednesday in the black with several benchmark indexes closing near session highs. Information technology and consumer discretionary led the way on a day when no market sector lost value.

Thursday was the last trading day of the week, as the markets closed Friday in observance of the Christmas holiday. Despite low trading volume, each of the major benchmark indexes posted solid gains, with the Global Dow, the Nasdaq, and the Russell 2000 gaining 0.9%. The Dow and the S&P 500 advanced 0.6%. Treasury yields and crude oil prices climbed higher, while the dollar was unchanged.

Eye on the Week Ahead

There isn’t much economic data available this week, other than the advance report in the international trade in goods for November. The week between Christmas and New Year’s Day is typically a slow week for trading.

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.