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By Connor
Smith | Friday, December 10 Streaks Snapped. U.S.
equities today clocked in their best week since this past winter.
The three major indexes all snapped recent losing streaks, but only the S&P
500 index
closed at a record. The Dow
Jones Industrial Average snapped a
four-week losing streak in blowout fashion. It rose 0.6% today and 4% on the
week. It's still off 1.3% from its record close, set on Nov. 8. The S&P
500 rose 1%, to a record 4,712.02,
bringing this week's haul to 3.8%. The Nasdaq
Composite rose 0.7%, and 3.6% for the week. The latter
two indexes snapped two-week losing streaks with their best percentage gains
since the week that ended on Feb. 5. It was an all-around win for the S&P 500
index. The 11 main sectors represented in the index rose, while 354 of
its individual components rose. The benchmark was led by gains for Oracle, Ford
Motor, Broadcom, and Costco
Wholesale. The strong
performance for stocks came despite sobering inflation numbers. Consumer
prices rose 0.8% in November from the month earlier, and 6.8%
year-over-year, the fastest annual pace since 1982, writes Barron's Megan
Cassella. The data put inflation at
a level widely expected to prompt the Fed to wind down its asset-purchasing
program more quickly, as Chairman Jerome Powell telegraphed last week, and it
could pull forward the timing of the central bank’s next interest-rate
increase. Immediately after the news,
the CME FedWatch tool, which tracks investors’ expectations for monetary
policy via moves in the bond market, showed expectations for three increases
in interest rates in 2022 diminished by 1 percentage point. But the decline
in expectations for rate increases quickly faded away, underscoring that
reasons for concern remain. The benchmark 10-year Treasury note was
trading at 1.45%, down from 1.51% before the consumer price index print, writes
Barron's Randall
W. Forsyth. The lower bond yield
reflected lower inflation expectations, as reflected in the “break-even”
spread between nominal Treasury yields and real yields on TIPS, which is the
market’s implicit long-range inflation forecast. That indicates the market
was looking for an even hotter inflation reading than economists, Mike
Schumacher, head of macro strategy at Wells Fargo, writes in a client note. The 10-year break-even
inflation rate contracted to 2.46% from 2.51% before the CPI release, he
writes. This continues a trend since mid-November, which shows longer-term
inflation expectations easing from a peak of 2.76%, according
to the Federal Reserve Bank of St. Louis. Though inflation looms, investors can
take heart in a strong week for stocks. String two more together, and
they call that a winning streak. As Coach Lou Brown said in Major
League II: It has happened before. Watch our TV show on Fox Business Fridays at 9 p.m. or
10:30 p.m. ET; Saturdays at 11 a.m.; or Sundays at 10 a.m. or 11:30 a.m.
ET. This week, an interview with Libby Cantrill, head of public policy
at Pimco, on how proposed new taxes could affect your portfolio. |
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DJIA: +0.60% to 35,970.99 The Hot Stock: Oracle +15.6% Best Sector: Technology +2.0%
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