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Weekly Market Updates

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Weekly Market Update 01/02/2022

by Justin J. Long CFP®, on Jan 02, 2022

Happy New Year! Welcome to 2022.

This New Year's Eve brought approximately 300,000 guests to the party to ring in the new year on the Las Vegas Strip. Revelers beared 30 degree temperatures accompanied by light rain, and were joined by millions more across the globe to watch "America's Party", which ended with a 10-minute fireworks display from the rooftops of 8 local casinos.

There are high hopes for better fortune in 2022.  All of us here at Diazo wish you and yours a prosperous year to come, filled with health and wellness.

And now on to the recap of this week:

HubSpot Video

Week in Review: Seasonality keeps market afloat to end 2021 

U.S. equities closed out the last trading day of 2021 on the downside, but all three major indexes registered solid gains on a yearly basis for the third-straight year, with the S&P 500 notching record highs 70 times along the way.

Equity news and economic reports were in short supply and volume was light, but investors continued to assess the omicron variant, solid economic and earnings growth, rising inflation pressures, and the commencement of monetary policy tightening.

Treasuries were mostly higher to apply modest downside pressure on yields, and the U.S. dollar traded lower, while gold gained ground and crude oil prices saw pressure. Asia finished mixed to close out the year, and Europe dipped in an abbreviated session, with several markets in both regions closed for the holiday.

The major indices ended the last week of 2021 on a mostly positive note, particularly for the S&P 500 (+0.9%) and Dow Jones Industrial Average (+1.1%). Both gained around 1.0% and set intraday and closing record highs this week. The Nasdaq Composite declined 0.1% while the Russell 2000 increased 0.2%. 

There weren't any specific catalysts driving the action, suggesting seasonal factors and year-end rebalancing activity played influential roles. This week encompassed part of the Santa Claus rally period, which is defined as the last five sessions of the year and the first two sessions of the new year. 

Ten of the 11 S&P 500 sectors finished in positive territory for the week. No sector rose more than the 3.7% gain in the real estate sector, but the materials (+2.6%), consumer staples (+2.5%), and utilities (+2.6%) sectors did compete. The communication services sector (-0.8%) closed lower after a tough session on Friday. 

There was plenty of COVID-19 news in the mix.

The bad news was that businesses continued to see Omicron-related disruptions, as called out by Micron (MU) and seen in flight/cruise line cancelations. The CDC even upped its travel notice on cruise lines to Level 4, advising people to "avoid cruise travel, regardless of vaccination status."

The CDC, however, shortened the recommended isolation time for asymptomatic people with COVID-19 to five days from 10 days. The FDA, meanwhile, is expected to expand eligibility for Pfizer's (PFE) booster shot to 12- to 15-year-olds on Monday. Johnson & Johnson (JNJ) said data demonstrated its booster shot was 85% effective against hospitalization in South Africa when the Omicron variant was dominant.

The Treasury market was quiet this week. The 10-yr yield increased two basis points to 1.51% (+59 bps in 2021) while the 2-yr yield increased four basis points to 0.73% (+61 bps in 2021). 

DJIA 35950.56 36338.30 387.74 1.1 18.7
Nasdaq 15653.36 15644.97 -8.39 -0.1 21.4
S&P 500 4725.79 4766.18 40.39 0.9 26.9
Russell 2000 2241.58 2245.31 3.73 0.2 13.7

As always, it is my pleasure to bring you this weekly update. If this or anything else is causing you pause or you would like further details, please feel free to reach out to me and we can schedule some time to chat. 

Justin J. Long CFP®
Founder/Lead Advisor
Diazo Wealth Group
702-745-1800 Direct
702-278-6560 Cell

Upcoming Economic Calendar

Real Time Economic Calendar provided by Investing.com.

Source: 1. FactSet

Source: Week in perspective provided by Briefing.com. Briefing.com offers live market analysis on their web site www.Briefing.com.

Source: https://www.schwab.com/resource-center/insights/content/schwab-market-update 

The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.

The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. The Russell 2000 Index tracks the performance of approximately 2,000 publicly traded small-cap companies in the United States. It is not possible to invest directly in an index.

The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (bps). One hundred basis points equals one percent.

Oil prices are represented by West Texas Intermediate (WTI) crude oil.

The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.

Innovative Adviser Solutions, LLC, a registered investment adviser, dba Diazo Wealt

Topics:FiduciaryFinancial PlanningMarkets

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