Financial News and Portfolio Management Discussion through January 8th

US stocks fell over the week as investors recalibrated their expectations for the Fed to begin tightening monetary policy. The S&P 500 dropped 1.8% and the Dow fell 0.3% for the week. Abroad, the FTSE All World Ex US was down 0.3% for the week. The yield on the 10-year Treasury surged with investors expecting the Fed to move faster to raise the Fed Funds Rate. After the 10-year Treasury ended the year at 1.50%, it jumped over the first week of 2022 to finish at 1.76%. It’s the highest the 10-year has been since January 2020.

US hiring fell well short of expectations in December with 199,000 new hires added. The unemployment rate dropped to 3.9% from 4.2% in November. Wage growth was up 4.7% over the year, a significant increase over recent years.

OPEC+ agreed to continue to gradually increase oil production.

Manufacturing continued to expand in December, but at a slower pace than November.

Analysts are projecting 22% growth in 4th quarter corporate earnings.

Minutes from the Fed’s December meeting outlined that they were planning on completing their bond purchase program in March and that they expected to raise the Fed Funds rate three times in 2022. In addition, they discussed reducing the size of their bond portfolio, another form of monetary tightening. The moves together were more aggressive than investors had anticipated.

US mortgage rates rose to their highest level since May 2020.

Initial jobless claims were 207,000 remaining near multidecade lows.

Eurozone consumer prices rose 5% over 2021, its fastest pace ever.

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources, but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated. Source: FMG Suite, LLC.
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