Friends
We had a very bifurcated market today. The Dow Jones Industrial Average finished off the Santa Claus rally in style, while the Nasdaq laid an egg. The narrative as we move into 2022 is that expected higher interest rates will be a headwind for tech and high valuation growth stocks while banks and value shares should be beneficiaries. In the first few days of the year, you also get the phenomenon where last years dogs, that were sold hard into year end for tax loss purposes, tend to bounce, while last years winners are sold to take the tax gain in the new year.
Whatever the case, by the close the Dow Jones Industrial Average was up 214 points to finish the day at 36,799. The S&P 500 was down 3 points to close at 4,793. The Nasdaq Composite Index was down 210 points to close at 15,622. Gold was up $15 to trade at $1,815 per ounce, while oil was up $.98 to trade at $77.06 per barrel WTI.
Interest rates as measured by the 10-year Treasury Note have moved higher in the first couple of trading sessions of the year. Last quarter when rates rose, stocks usually sold off. Yes, Nasdaq shares did decline today, but so far, the reaction to the move higher in rates has been muted. It’s always hard to glean too much from the first couple days of trading in a new year but given increasing headwinds it is rather impressive that stocks continue to be resilient. We have a busy week ahead with job data tomorrow and Friday. Stay tuned.
Have a nice evening everyone.
