The Markets (as of market close February 4, 2022)
Last week was notable for a stronger-than-expected jobs report and mixed fourth-quarter earnings data. Stock values rose and fell throughout the week, ultimately closing higher. Crude oil prices rose for the seventh consecutive week, as prices near an eight-year high. A cold snap in the United States and concerns about the Ukrainian situation contributed to the raise in the prices of natural gas and oil. Each of the major benchmark indexes ended the week higher, led by the Nasdaq, which had one of its worst days last Thursday, only to be followed by one of its best performances. The large caps of the S&P 500 and the Dow pushed higher. The Global Dow gained over 2.0%, and the small caps of the Russell 2000 advanced 1.7%. The dollar fell, while gold prices climbed higher.
Stocks pushed higher last Monday for the second consecutive session as dip buyers snatched bargains in beaten-down growth stocks.
Last Tuesday, Wall Street enjoyed its best three-day rally since 2020. Strong fourth-quarter earnings data from some major corporations helped bolster investor confidence. Each of the major benchmark indexes advanced, with the Global Dow (1.4%) and the Russell 2000 (1.1%) gaining the most, followed by the Dow and the Nasdaq, each of which added 0.8%. The S&P 500 rose 0.7%.
Stocks closed generally higher for the fourth consecutive session last Wednesday, with only the small caps of the Russell 2000 lagging.
And last Thursday saw the biggest tech sell off since the fall of 2020, ending a four-day rally. The Nasdaq fell 3.7% as a major technology company saw its shares fall more than 26% following its underwhelming fourth-quarter earnings results. Adding to investor worries was the latest jobless claims report, which showed 238,000 new claims for unemployment insurance were filed last week. The S&P 500 declined 2.4%, the Russell 2000 lost 1.9%, the Dow edged 1.45% lower, and the Global Dow dipped 0.8%.
A strong jobs report and favorable earnings data from a major tech company helped power stocks higher last Friday. Ten-year Treasury prices fell, driving yields up to 1.93% as it looks more likely that the Federal Reserve will raise interest rates by 50 basis points in March.
The next round of data on inflation begins this week with the release of the Consumer Price Index for January. Consumer prices rose 0.5% in December and 7.0% in 2021. Little change is expected in price pressure, at least through March, when the Federal Reserve is expected to raise interest rates for the first time since 2018 in what could be several such advances throughout this year.
All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
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.
