| Top News Shutterstock Stocks closed out the week with a decline, but managed to limit some damage with last-hour buying. The Nasdaq ( COMP.IND) -1.9% took the brunt of the selling again, while the S&P (SP500) -0.9% and Dow ( DJI) -0.2% also finished in the red. The S&P and Nasdaq had their second-straight losing week, off 1.2% and 2.6% respectively. The Dow Industrials have been down four weeks in a row. Rates tumbled, with the 10-year Treasury yield falling 10 basis points to 1.35%. Nonfarm payrolls came in lower than expected for November, but the jobless rate dropped and the labor participation rate rose. Rate expectations were pulled forward and there is now a 50% of a quarter-point rate hike in May, according to fed funds futures. | | Central Banking After spending months arguing that the surge in pandemic inflation was largely due to "transitory" forces, Fed Chair Jerome Powell told Congress on Tuesday that it's "probably a good time to retire that word." Many have taken issue with the verbiage in recent months, given that Powell has acknowledged that inflation is proving more powerful and persistent than expected. As a result of the price pressures, the Fed is now considering a faster tapering to its asset purchase program, shifting gears to tighter monetary policy.
Can tapering be good for the markets? While stocks sank after the comments - with traders boosting bets on upcoming interest rate hikes - futures are already pointing to renewed gains this morning. Volatility may still be the name of the game, but if history is any guide, the Fed's "taper tantrum" of 2013 was followed by strong gains for equities, as traders bet the economy was healthy enough to stand on its own. Following Ben Bernanke's comments in May 2013, stocks fell 5.8% in the next month, but for the rest of that year, the market was up 17.5%. | | Sponsored By StartEngine With a goal to help raise $10 billion by 2029, StartEngine has big plans... and they're already gaining momentum: 146% revenue growth YoY in the first half of 2021. 500,000 prospective investors on the platform Led by Howard Marks, co-founder of Activision (NASDAQ:ATVI). Launched a first-of-its-kind trading platform $400M raised for more than 500 companies. Moving into wine collections, real estate, and more
Until December 19th, you can join over 30,000 other people and invest in StartEngine itself. Check it out here for more information. | | Healthcare The report of an Omicron variant case in California pushed stocks down sharply into Wednesday's close.
When you compare the market reaction to that of other COVID waves and the Delta variant, what's different this time is that there was not a flight to Big Tech stocks, Florence Barjou, CIO at Lyxor Asset Management, said on Bloomberg. "This is really a growth-based selloff, which is why it looks a little bit like panic," Barjou says. "If we do get better news (on Omicron) we think it looks more like an entry point."
JPMorgan strategist Marko Kolanovic goes a step further and posits that Omicron could be the highly-transmissible yet milder variant that crowds out the more severe variants. "As such, we view the recent selloff in these segments as an opportunity to buy the dip in cyclicals, commodities and reopening themes, and to position for higher bond yields and steepening," he says. | | Media Fifteen years after he co-founded the company, Jack Dorsey resigned as CEO of Twitter ( TWTR) on Monday, saying he wanted the company to move on from its founders. Shares rose as much as 12% on the news in premarket trading, but closed the session off nearly 3% as investors digested the developments. "This one really has to shake out... it has got lower lows," said Dan Nathan of Risk Reversal Advisors. "We've seen fleets, Super Follows and Twitter Blue, but if technology and innovation at the company have been the big problem, this kind of news is not going to get the company going." Bigger picture: Sources say that the succession was planned for more than a year, but it could still be challenging to get the company to repivot to areas like media or social e commerce. Last year, activist hedge fund Elliott Management took a 4% stake in Twitter and tried to get rid of Dorsey. There were concerns that he was distracted, since he was also the CEO of mobile payments company Square ( SQ), as well as other big interests, like in cryptocurrency, which were taking him away from his job. | | U.S. Indices Dow -2.% to 34,899. S&P 500 -2.2% to 4,595. Nasdaq -3.5% to 15,492. Russell 2000 -4.2% to 2,246. CBOE Volatility Index +59.8% to 28.62.
S&P 500 Sectors Consumer Staples -0.2%. Utilities -1.%. Financials -0.6%. Telecom -3.3%. Healthcare -0.9%. Industrials -2.4%. Information Technology -3.2%. Materials -2.3%. Energy +1.7%. Consumer Discretionary -3.6%.
World Indices London -2.5% to 7,044. France -5.2% to 6,740. Germany -5.6% to 15,257. Japan -3.3% to 28,752. China +0.1% to 3,564. Hong Kong -3.9% to 24,081. India -4.2% to 57,107.
Commodities and Bonds Crude Oil WTI -10.4% to $68.17/bbl. Gold -3.3% to $1,791.4/oz. Natural Gas +8.6% to 5.498. Ten-Year Treasury Yield +0.3% to 131.17.
Forex and Cryptos EUR/USD +0.27%. USD/JPY -0.59%. GBP/USD -0.84%. Bitcoin -8.9%. Litecoin -12.4%. Ethereum -6.3%. Ripple -12.8%.
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