Wall Street ends lower, investors eye inflation and Omicron

With the producer price index (+9.6%) soaring to its largest gain since 11 years and 2/3 of Nasdaq stocks trading below their 200-day moving average, there was again a flight out of equities and especially out of tech as investors await Wednesday’s Fed meeting for some clarity on inflation. The tech leaders like Microsoft and Apple are the ones that drew down the most and, as today’s expert put it, “When the leaders sell off, it’s not a good sign.”  Financials gained betting the Fed will take a hawkish position and it is widely expected that there will be modest rate hikes in Q3 next year. Awaiting the news from the Fed, volume was a little below average at 10.8 billion. 

Wall Street ends down; investors eye Omicron and Fed meeting

After a few sessions of the market feeling more confident about the Omicron variant, fear took over again today with the virus spreading suddenly like wildfire in London and recording the first death, with much more expected to come. So just as there was a big rally on the leisure stocks last week, today there was a great exodus from them and a rush back into the defensive sectors of consumer staples, utilities and real estate.  In its monthly meeting that starts Tuesday, the Fed is expected to adopt a more hawkish tone regarding a wind-down and economists see a ¼ to ½% rate hike in Q3 2022.  Volume was more elevated at 10.8 billion shares traded. 

Powerful Economic Forces

This week's WealthTrack program covers the topic of "Powerful Economic Forces" in which Wall Street guru Ed Hyman outlines the major forces influencing the economy and stock market during the past year (all of which he accurately predicted last year) and gets out his crystal ball in sharing his expectations for 2022.  Hope everyone enjoyed the nice sunny breezy weekend.  More sun and breeze coming too.  

10 of the best blue-chip stocks to buy for 2022

For your weekend reading, I submit this week's edition of U.S. News Invested since, as investors have been flocking back to the blue chips of late, here are their top 10 picks for 2022.  All are solid names.  Enjoy the weekend.  

Wall St gains, S&P hits record closing high as CPI meets expectations

Though today’s CPI report was not all that great, it was nonetheless in line with expectations and taken by investors as signaling a peak rather than a sustained level. As the high CPI number is attributed largely to supply chain issues which are taken to be temporary and the data even suggests that the problem could be easing and inflation could be shrinking, all the indexes got another considerable boost with the Dow up 216 points.  Despite the media portraying the inflation problem as dire, the market at least sees it as getting solved in the foreseeable future and expect any Fed hikes to be modest.  Investors won’t mind that, preferring a hike and Fed tightening to more inflation.  Volume remains below average at 9.6 billion. 

Wall Street closes lower ahead of inflation data, Fed meeting

The Dow was the only index today to make it at all in the black but lost even that much by close.  The Nasdaq took a much bigger hit as investors took profits after a 3 day relief rally and flocking back to cyclicals. One bit of good news is that new unemployment claims came in at their lowest in 52 years, though economists point to current labor market figures as misleading due to the large numbers who have dropped out of the market.  Today’s selloff was also likely due to caution preceding Friday’s CPI inflation data.  Will the Fed be doing a rate hike next year or not?  Volume was below average at 9.7 billion. 

Wall St closes higher as vaccine update feeds optimism

The Dow spent most of the day heavily in the red until the late news of the Pfizer vaccine offering protection against Omicron triggered a comeback and a close modestly in the black. And it became another risk-on day with investors continuing the migration back to tech, favoring quality growth stocks over cyclicals. The market now believes that it won’t take much to tame inflation and thus any coming rate hikes are likely to be modest, which provided another boost to equities. The S&P, falling 4.4% during Thanksgiving week due to the Omicron panic has today regained almost all its lost ground, being now less than one point below the pre-panic close.  With the positive vaccine news, the S&P travel stocks were the biggest gainers.  Volume was a little below average at 10.3 billion.