Mid-Week Market Minute 01.05.22

Market Updates

Stocks in the U.S. were little changed in the first few days of trading this week as investors await the minutes from the December Federal Reserve meeting. Fed officials said in that meeting the Federal Reserve will halt asset purchases by early 2022, setting the stage for three interest-rate hikes this year to help counter the threat of persistently higher inflation. The Fed will remain a key focus for investors in the near-term, along with COVID-19 developments, fiscal stimulus progress, and interest rates. In addition to the Fed minutes that will come out this afternoon, investors are looking forward to the jobs report on Friday, where the expectation is for 400,000 new jobs with the unemployment rate dropping from 4.2% to 4.1%. Payroll manager ADP released its National Employment Report this morning. The report offers a preliminary view into December hiring ahead of the Labor Department’s Friday jobs report.  Private jobs growth totaled 807,000 for December, well above the consensus estimate for payrolls growth of 414,000. On the COVID-19 front, the country recorded a record more than one million cases yesterday, with the seven-day average infections now at 550,000, up eight-fold from the 70,000 pace of early November 2021. A vast majority of the new cases are of the Omicron variant, which so far appears to be less severe than the Delta variant. Markets got another reminder of the continuing threat to global growth from the pandemic as Hong Kong reimposed social curbs and halted flights from eight countries. In bonds, yields moved convincingly higher with the 10-year Treasury note climbing to 1.68% after finishing 2021 around 1.51%.

Source: GSAM, Daily Upside, JPM, Factor Investor

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