Markets Extend Rough Start for 2022…..

U.S. equities were able to bounce off the worst levels of the day to finish mixed in what has been a bumpy start for 2022. The markets continued to contend with the rapidly-spreading omicron variant and expectations that the Fed is set to accelerate down the tightening path. Meanwhile, results from some heavyweights in the banking sector that will get the ball rolling for Q4 earnings season later this week may have added to the trepidation. Treasuries were mixed and the U.S. dollar rose, while gold saw a modest gain in choppy trading and crude oil prices were lower. In equity news, Take-Two Interactive Software agreed to acquire Zynga in a cash and stock transaction with an enterprise value of $12.7 billion, while Lululemon Athletica warned that Q4 results are likely to be at the low end of previous guidance. This week’s economic calendar kicked off with a stronger-than-expected read on wholesale inventories. Europe finished with widespread losses to begin the week, while markets in Asia were mixed amid lighter volume with markets in Japan closed for a holiday.

The Dow Jones Industrial Average fell 163 points (0.5%) to 36,069, the S&P 500 Index declined 7 points (0.1%) to 4,670, while the Nasdaq Composite nudged 7 points (0.1%) higher to 14,943. In heavy volume, 4.4 billion shares of NYSE-listed stocks were traded, and 5.2 billion shares changed hands on the Nasdaq. WTI crude oil lost $0.67 to $78.23 per barrel. Elsewhere, the gold spot price advanced $3.00 to $1,800.40 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—gained 0.2% to 95.95.

November wholesale inventories increased 1.4% month-over-month (m/m), revised higher than the previously reported 1.2% m/m gain. Sales rose 1.3%, compared to forecasts of a 1.0% increase, and after October’s upwardly-adjusted 2.5% increase.

Treasuries were mixed, as the yield on the 2-year note was up 3 basis points (bps) at 0.90%, the yield on the 10-year note ticked 1 bp higher to 1.77%, while the 30-year bond rate lost 1 bp to 2.11%.

©2022 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.