Market Recap For Friday, December 17, 2021
Here is a Market Recap for Friday, December 17, 2021 Stocks extended Thursday’s losses, with the market ending a volatile week in the red as market participants continued to digest ongoing risk surrounding the Omicron variant and the Fed’s new monetary policy, which signaled a faster rate of taper and interest rate hikes next year. Notable Numbers: S&P 500 (SPY): -1.02% Nasdaq (QQQ): -0.50% Dow Jones (DIA): -1.42% Russell 2000 (IWM): +0.92% Volatility Index: +3.19% JP Morgan (JPM): -2.28% Oracle (ORCL): -6.39% AMC: +19.22% FedEx (FDX): 4.95% Rivian (RIVN): -10.26% The main focus of market participants remains on the Federal Reserve’s latest monetary policy decision, with the Central Bank doubling the pace of tapering and suggestions that the interest rate may be raised three times in 2022. The potential for higher rates continues to weigh heavily on technology and growth stocks whose valuations rely heavily on future earnings potential. In the last month, the Nasdaq has fallen by -3.43% and the Russell 2000, which tracks the performance of small-caps, fell 8.32% in the last month. On the other hand, cyclical stocks in the energy and financials sectors outperformed on Thursday, with the prospects of higher interest rates and stronger growth seen as benefiting these sectors. The Dow Jones (DIA) has only lost -1.23% in the month and has been trending upwards in December. As always, it’s important to balance a portfolio with both growth and value stocks. Troy Gayeski, Chief Market Strategist at F5 Investments, said “The thing investors have to understand is, we're going through a major transition in monetary policy. The Fed has been running emergency policies arguably far longer than they should have been, and as that money supply growth slows down as they ease off the balance sheet expansion and ultimately hike next year, one would at least expect more volatility in markets. And that's really what we've been seeing the last month."
Highlights: The Biden administration on Friday recommended the Federal Communications Commission grant Alphabet's Google and Facebook-parent Meta licenses for an undersea cable. The companies entered into national security agreements to protect data on the Pacific Light Cable Network system, an undersea fiber optic cable system that will connect the United States, Taiwan and the Philippines. Tesla Inc was hit by a lawsuit over CEO Elon Musk's social media posts including his Twitter poll on stock sales that pulled down its stock prices. Investor David Wagner called for access to internal documents to investigate whether Tesla and Musk failed to adhere to fiduciary duties Rivian stock gapped down another roughly 11% after the company reported earnings that showed steep losses and said it expects to fall “a few hundred vehicles short of its 1,200 production target for this year. Alibaba Deputy CFO Toby Xu, making his first major public remarks since being named this month to take over as CFO, said that international e-commerce "will become one of the key growth drivers", adding that 57% of revenue for Cainiao, Alibaba's logistics unit, comes from overseas. Reddit announced it was filing for an IPO with an estimated $15 billion valuation. I love the platform but I think they’ll have a hard time monetizing users. Rivian also announced it was planning to build a new factory in Georgia in order to boost production Kellogg’s has reached a new tentative agreement with its 1,400 striking cereal plant workers that could bring an end to the strike that began Oct. 5.