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The major U.S. stock indexes struggled to stay above water in the year’s first week of trading. The U.S. jobs report for December underwhelmed, with 199,000 new jobs created in the month, far below earlier street estimates of 440,000. The spread of the Covid-19 omicron variant is thought to have impacted job creation in the month, while the unemployment down at 3.9% and a 0.6% month-over-month rise in wages reflects a continuing labor shortage. But mainly, investors seemed to turn tail on the hawkish tone of the minutes from the U.S. Federal Reserve Board’s last Federal Open Market Committee meeting, which suggested both and earlier-than-expected rate hike followed by a reduction in the Fed’s balance sheet, a combination which in the past has resulted in some cooling off of stock market performance. The benchmark 10-year U.S. Treasury note, as you might expect, sold off through the week, pushing its yield to 1.767% by Friday from 1.51% a week ago.
In Canada, the labor market added 55,000 new jobs in December, about double street estimates, while the unemployment rate ticked down to 5.9% in December from 6.0% in November.
The S&P 500 Composite Index booked a weekly loss of 1.9% to start the year, while the Nasdaq Composite Index plunged 4.5%, as technology and healthcare stocks (and most growth stocks) came under intense selling pressure after the FOMC minutes were released. Toronto’s S&P/TSX Composite Index retreated 0.7% on the week, led by information technology and materials stocks, even as the price of crude oil rose 5.0%. Gold remained rangebound, and closed the week down 1.8%.
Outlook 2022. Kristina Hooper, Global Market Strategist at Invesco Canada, summarizes Invesco’s investment outlook for 2022, and focuses on key scenarios for inflation in the coming year.
A hinge moment in history. Tyler Mordy, CEO and CIO at Forstrong Global, sees a new investment regime unfolding in 2022 as the old year fades into memory.
Freehold Royalties puts earnings in investors’ pockets. Money expert Gordon Pape looks at Freehold Royalties’ record of steady dividend increases.
U.S. expats still need to file with IRS. Tax lawyer Samantha Prasad, partner at Minden Gross, on the onerous tax rules for Canadian-resident U.S. citizens.
The perilous market path ahead. Greg Taylor, CIO at Purpose Investments, looks at whether markets will test new highs or succumb to Fed fear in the coming months.
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