Most Economic predictions for 2022 suggest positive GDP (Gross Domestic Product) between 3.5 and 4%. Certainly, a very acceptable rate of growth.
Last Friday’s job numbers suggest quality job gains, with an unemployment rate of 4%. It appears more and more people are entering the job market. Certainly, a very good sign.
The Fed has the job of attempting to slow down inflation, without choking off economic growth. Not an easy task! We are hearing 4 to 5 rate hikes for 2022, with a possibility of a .50 hike in March. In March the Federal Reserves bond purchasing program is also slated to end.
How high will mortgage rates & automobile loan/lease rates rise after the Fed starts to move? How will rising wages and input costs impact Corporate America’s profits? We will certainly find out, fairly soon!
Will the Fed be sensitive to the equity markets? Meaning, if we have further pullbacks, will Powell ease up on the rate-raising throttle, or is he determined to make up for being so late to ending monetary stimulus? As always, time will tell!
So far, 56% of S&P 500 companies have reported earnings with 79% beating 4th quarter profit estimates and 77% beating revenue targets. This week we’ll hear from another 76 companies within the S&P. Also, this week we’ll hear the latest reading on the Consumer Price Index (CPI). Many are expecting a reading of 7.2%!!!
Markets Last Week
Last week was a roller coaster ride with Facebook (Meta) missing on its earnings reports and its stock got wacked, down from it’s high of 384/share, closing last Friday @ 237/share. Amazon was up next, already down from it’s all time high 3774/share to under 3K. Amazon did NOT disappoint with its positive report, sending the shares up 13% on Friday to finish @ 3152.
Without Amazon, we may have had another down week, however last week turned out positive with the Dow Jones rising 1.06%, the S&P 500 1.57%, the Nasdaq Composite 2.41% and the Russell 2000 1.74%.
Foreign stocks followed the lead, rising 2.10% and Emerging Market stocks rose 2.53%.
Bond yields rose sharply as last Friday’s job report surprised many. The 10 Year yield rose to finish last Friday @ 1.93% and the 2 Year yield rose to 1.32%.
Out of the 11 sectors within the S&P 500, only 2 are currently positive this year. Energy and Financials are positive with the 9 others in the red, with Real Estate currently down the most, off (9.8%) year to date.
Social Security Webinar
A reminder we’ll be presenting our Virtual Social Security Workshop in conjunction with Jefferson Hospital, tomorrow, Tuesday, February 8th @ 6pm. For those who have not yet filed for benefits, this will be your time to learn the rules and get all of your questions answered. Feel free to pass along this invitation to others, as all are welcome to join the webinar! REGISTER HERE
