Stocks ended last week down after the simultaneous expiration of single-stock options, single-stock futures, and stock-index options. Stock-futures also added to the volatility. The 10-year U.S. Treasury note dropped to its lowest yield in two weeks at 1.401% despite the Fed’s hawkish turn. For the week, the Dow had a 1.7% decline, the S&P 500 was down 1.9% and the Nasdaq finished with a weekly drop of 3%. Over the past four weeks, small-cap and value stocks have both entered correction territory.
A short Christmas trading week is ahead for investors, although it doesn’t look like it will be quiet week with the omicron COVID variant looming. Both international and US Markets are taking notice as Omicron concerns and restrictions begin weighing on the economy. The Netherlands on Sunday reimposed a lockdown and other European countries also enacted new holiday restrictions. China's central bank cut rates to counter a loss of economic momentum. Here in the U.S., schools across the country are once again moving to virtual instruction, businesses are feeling the drag of the labor/supply shortage exacerbated by Omicron, and intensive care units in many cities are at or close to full capacity. President Biden will deliver remarks tomorrow and announce new steps to combat the country's fight against the Omicron wave. So far, each wave of the pandemic has had a smaller economic effect than the one that preceded it. While markets are betting that will be the same with Omicron, it is still too early to tell. The symptoms seem milder, but it is extremely contagious, and that could prove to be very disruptive for the world economy. Take for example China, which has depended on a "zero-COVID" policy, and the potential for coming quarantines and lockdowns to further shake up the global supply chain.
Despite the resurgence of COVID, ‘Spider-Man: No Way Home’ secured the third-best opening in cinematic history with $253 million in ticket sales. Analysts were projecting that the movie may surpass $100 million but surpassing $250 million was a large surprise. This is positive news for the movie industry that has been decimated by the pandemic and the industry’s move towards streaming.
With Christmas arriving this Saturday, retailers are preparing for last minute holiday shoppers. Target is offering same-day online order delivery as late as 6pm on Christmas Eve. Home delivery service, Shipt, is allowing gifts to be delivered as soon as an hour with the last delivery window between 5 and 6pm. While we recommend shopping sooner rather than later, there is hope for those who tend to wait till the last minute. From First Merchants Private Wealth Advisors, we wish you and your families a happy holiday season!
