Markets Begin the Week Lower…..

U.S. equities began the week on the downside, paring some of last week’s advance, as uncertainty surrounding the ultimate impact of the omicron variant remained, and as the markets await this week’s Fed monetary policy decision. The Fed’s announcement will precede other key decisions around the globe, including the European Central Bank, the Bank of England, and the Bank of Japan. The economic calendar was dormant today, but is set to heat up tomorrow with a second look at the November inflation landscape and a read on small business optimism. In equity news, Harley-Davidson reached an agreement with AEA Bridges Impact Corp to combine its electric motorcycle division and create a new publicly-traded company, while Pfizer agreed to acquire Arena Pharmaceuticals in a transaction with a total equity value of about $6.7 billion. Treasuries gained ground to apply downside pressure on yields, and the U.S. dollar was slightly higher, while gold rose modestly, and crude oil prices fell. Europe finished lower with the markets continuing to monitor the omicron variant, while markets in Asia were mixed.

The Dow Jones Industrial Average fell 320 points (0.9%) to 35,651, the S&P 500 Index decreased 43 points (0.9%) to 4,669, and the Nasdaq Composite declined 217 points (1.4%) to 15,413. In moderate volume, 4.3 billion shares of NYSE-listed stocks were traded, and 4.4 billion shares changed hands on the Nasdaq. WTI crude oil lost $0.38 to $71.29 per barrel. Elsewhere, the gold spot price increased $2.80 to $1,787.60 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—advanced 0.3% to 96.35.

Treasuries were higher as the economic calendar was void of any major releases today, as the yield on the 2-year note lost 3 basis points (bps) to 0.63%, while the yields on the 10-year note and the 30-year bond decreased 7 bps to 1.42% and 1.81%, respectively.

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