Weekly Market Commentary – 12/10/2021

-Darren Leavitt, CFA

US equity markets rebounded nicely over the week as fears of the Omicron variant subsided.  It appears the variant, while more contagious, is less severe.  Sentiment was also bolstered by Pfizer’s preliminary findings that their vaccine regiment neutralized the variant and curbed severe illness.  Markets also took some solace in progress made by Congress regarding the debt ceiling that is set to expire on December 15th.  Economic data was headlined by another hot CPI that showed the highest year-over-year increase since 1982.  That said, markets took the print in stride as the increase was widely expected.

The S&P 500 gained 3.8% to set another all-time high, the Dow added 4%, the NASDAQ increased 3.6%, and the Russell 2000 tacked on 2.4%.  In the Treasury market, the front of the end continued to sell-off as traders expect the Fed to announce their plans to accelerate the pace of the taper.  The Federal Open Market Committee (FOMC) will provide its most recent views on the economy and its policy this coming Wednesday.  The 2-year yield increased eight basis points to close at 0.66%.  The 10-year bond yield rose 15 basis points to 1.49%, essentially giving back all the gains made in the prior week.  Oil prices increased 8.5% or $5.65 to close at $71.70 a barrel.  EIA crude oil inventories showed a slight draw for the week.  Gold prices were essentially unchanged for the week closing at $1784.8 an Oz.

Inflation data dominated last week’s economic data.  CPI increased 0.8% over the previous month, higher than the consensus estimate of 0.6%.  On a year-over-year basis, consumer prices rose 6.8%.  Core CPI, which excludes food and energy, came in at 0.5%, in line with expectations.  The Core number increased 4.9% over the prior year.  Initial claims fell to 184k versus the estimate of 223k.  Continuing claims regressed a bit coming in at 1.992 million.  Preliminary University of Michigan’s Consumer Sentiment rebounded to 70.4 from November’s final reading of 67.4.  Next week, we will get a read on: Producer Prices, Retail Sales, and various housing data.

Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness.  All such third party information and statistical data contained herein is subject to change without notice.  Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person.  Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures.  All investments involvement risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.