Markets Rebounded as Omicron Appears Milder Than Previous Variants… The Santa Claus rally showed up right on time and officially ends January 5th. Infections from the fast-spreading omicron variant swept the nation while hospitalizations rose at a much lower rate.
What it means— It was a quiet week on the economic front, with almost no reports and little else to derail the equity march higher except for some final year-end tax selling. The government shortened isolation guidelines and Americans appear to be looking past the rising infection rate as investors drove the S&P-500 to another all-time high.
Big names like Amazon and Google seem tired, while Facebook, er, Meta Platform and Apple continue to power ahead. We’re watching another major rotation away from over-priced big tech, but that’s been a market head-fake for two years.
Interest Rates Remain Muted, With the 30-year Treasury Bond Yield Just Under 2%… The 30-year yield traded at 1.96% on Wednesday, just below the 20-year yield of 2%.
What it means— The difference between the two yields of just a few basis points isn’t enough to call the curve inverted, even though it’s technically true. Let’s just call it flat on the long end.
Since fixed-income investors aren’t selling long-maturity bonds shows that they believe that inflation will fall dramatically next year. Other buyers will more than make up for the Fed ending its bond-buying program, or both.
Changes in the bond market tend to be quick and sharp. Without a major economic upheaval, there isn’t much reason for rates to go lower. Mortgage rates have risen back to early December levels at 3.11%.
Rates could shift suddenly higher if inflationary fears persist or if the Fed actually raises rates several times this year. Be careful with bond portfolios in 2022. Most investor portfolios are built around interest rates falling. Changing Fed policy to fight inflation will bring volatility and losses to the standard “haven of safety” – a bond portfolio.
Florida Man Uses Flamethrower To Protest Neighbor’s Parking Habits… Andre Abrams of Gainesville, Florida, used a commercial flamethrower to express his displeasure with a neighbor.
Abrams was charged with felony aggravated assault with a deadly weapon without intent to kill after he shot flames at the neighbor’s vehicle while three teens were inside of it. The flames came within five feet of the vehicle, but no one was hurt. Neighbor Ashley Gainey said that Abrams often used the flamethrower to scare off guests at her home, and that when he used it at night it would light up the sky like daylight.
For anyone wondering, Abrams was not using a Tesla flamethrower; instead, his unit came from X Products LLC. Flamethrowers are legal in all states except Maryland and California and require no license or permit.
Data supplied by HS Dent Research
“When the facts change, I change my mind.
What do you do?” ~ John Maynard Keynes
Our plan is “the plan will change.”
What is your plan?
Relative strength measures the price performance of a stock against a market average, a selected universe of stocks or a single alternative holding. Relative strength improves if it rises faster in an uptrend, or falls less in a downtrend. It is easily applied to individual positions in your portfolio and to sectors and asset classes.
Investor Resources, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion.