Buyers might want to believe twice about placing their income to function in China, contends DoubleLine founder Jeffrey Gundlach.
“China is uninvestible, in my feeling, at this stage,” the bond king explained to Yahoo Finance in an job interview at his California estate. “I have under no circumstances invested in China long or short. Why is that? I don’t have confidence in the knowledge. I don’t have confidence in the connection among the United States and China any longer. I assume that investments in China could be confiscated. I imagine there’s a threat of that.”
Gundlach’s opinions arrived in advance of DoubleLine’s 3rd yearly Roundtable Primary trader party on Tuesday.
Some of Gundlach’s problems on China played out in grand fashion very last yr.
The ongoing crackdown on the functions of big Chinese online providers these types of as Didi by the authorities has rocked traders in the space. The clamping down on the country’s biggest tech names has now led to a tightening of listing necessities by the Chinese government.
To that close, Didi plans to delist from the New York Stock Trade afterwards this 12 months not too lengthy immediately after a disastrous IPO (in big component for the reason that of Chinese authorities).
DoubleLine founder Jeffrey Gundlach (right) tells Yahoo Finance China is uninvestable.
Meanwhile, the lengthy reach of China’s governing administration also hammered just after-university tutoring corporations these as TAL Education and learning Group — shares of the identify plunged about 95{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2021.
All of this is in addition to China’s ongoing battle towards the increase of cryptocurrencies.
The investing headwinds in the place present up in how the country’s vital indexes executed in 2021.
For instance, the Golden Dragon Index — which tracks the efficiency of mid- and substantial-cap Chinese shares — plunged about 49{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2021. The Wall Road Journal factors out the whole value of China’s onshore stocks rose 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2021, underperforming the S&P 500’s progress.
Gundlach is significantly more optimistic on rising marketplaces, minus China (which he won’t assume is an emerging industry any longer).
“I type of believe the subsequent move, the huge go is to enter emerging markets. We have been in zero rising market place equities this complete time. And, we have been underweight right until really a short while ago emerging market place personal debt as nicely,” included Gundlach.
The rally in Coca-Cola’s stock (KO) is just starting, stated a single intently watched beverage analyst on Wall Avenue.
“We see the organization exiting FY21 changeover year more robust for four factors: 1) powerful emerging markets irrespective of continue to low vaccination amount, 2) on-premise recovering speedier than originally forecasted, 3) restructuring and portfolio rationalization led to a much more focused and agile group, and 4) gross margin benefiting from incidence model. In addition, the valuation is powerful in mild of improved fundamentals with a fantastic line of sight for EPS to mature a 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} CAGR by way of FY23 reaching $2.71 that yr, ex. prospective divestiture of bottling assets,” claimed Guggenheim’s Laurent Grandet.
Grandet lifted his rating on Coca-Cola to Acquire from Neutral with a revised selling price focus on of $66. He also increased his earnings projections on Coke for the upcoming a few fiscal many years.
Coke’s shares rose 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $59.86 in pre-sector investing Tuesday.
The analyst’s get in touch with arrives as Coke has remarkably been a prime-accomplishing inventory these previous 3 months.
Bottles of Coca-Cola smooth beverages are shown at a supermarket in the Brooklyn borough of New York. (Image by Ramin Talaie/Corbis through Getty Illustrations or photos)
We say surprising as the corporation — alongside with rivals in the packaged foodstuff space — proceed to struggle high amounts of inflation that is weighing on income margin likely. And for Coke precisely, 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of its U.S. sales are on-premise and 30{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} is on-premise overseas (or tied to going out at places to eat, sporting situations, and many others.) — not a stellar position to be amid the ongoing, unpredictable pandemic.
Shares of Coke have rallied to the tune of 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the earlier 3-months, according to Yahoo Finance Additionally data. The S&P 500 has returned 9.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the duration of that very same stretch.
But Grandet thinks now is the suitable time to perform Coke’s stock, citing far better expense administration less than CEO James Quincey, a gradual return to normalcy in men and women going out to destinations and the the latest acquisition of sports consume model BodyArmor.
Provides Grandet, “We imagine the corporation is emerging leaner, and extra agile with a portfolio targeted on greater and more successful brand names that must drive better performance. The personal savings should assistance guidance promoting investments in 2022 again to 2019 level which need to reward the leading line. In addition, the acquisition of BodyArmor — now integrated in our product — could increase 300 details of progress to the North The united states segment and 100 basis factors to the consolidated enterprise in FY22.”
U.S. stocks closed at record highs on Monday, as investors built on momentum from last week into at least the first session of the new year. The S&P 500, Dow and Nasdaq each advanced.
U.S. equities posted another year of solid gains in 2021, rising by 27{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and delivering a rare third consecutive double-digit annual percentage increase. Within the S&P 500, the energy and real estate sectors outperformed, gaining more than 42{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} each during the year for these sectors’ best annual gains on record.
Still, the blue-chip index’s robust overall rise was powered on a stock-by-stock basis by just a handful of mega-cap names. According to Goldman Sachs analyst David Kostin, the five largest components of the S&P 500 (or Facebook, Apple, Amazon, Microsoft, Google) together returned 37{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} last year – and now constitute about 23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the entire index.
“In 2022, variables associated with earnings and valuation will determine the performance of the S&P 500 index and its underlying constituents,” Kostin wrote in a note Monday. He expects the index to rise another about 7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to end 2022 at 5,100, with his outlook one among several Wall Street predictions calling for a gain to more than 5,000 for the S&P 500 this year.
“From an earnings perspective, decelerating economic growth will limit sales gains for many companies. Consequently, stock return dispersion will be most evident when viewed through the margin channel,” Kostin added. “Stocks with high labor cost ratios and exposure to wage inflation will likely underperform.”
But for the S&P 500 as a whole, a 27{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} rise and 29{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} total return this past year bodes favorably for the coming period. In the 71 years spanning back to 1950, when the S&P 500 posted a total return of 25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} or more in a year, stocks rose 82{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the time the next year, according to data from Truist Advisory Services co-chief investment officer Keith Lerner. However, the magnitude of returns could moderate.
“I think that 2022 is going to be a good year that tends to follow a great year,” Sam Stovall, CFRA chief investment strategist, told Yahoo Finance Live late last week. “We certainly have a high wall of worry that we’re going to have to scale … in terms of inflation concerns, what the Fed will be doing with interest rates, et cetera.”
And indeed, this week investors will be eyeing new economic data including the Labor Department’s December jobs report to help show the relative strength of U.S. economic growth in the final weeks of the year, as inflation concerns and labor shortages continued to ripple across the country. Risks around the latest surge of the coronavirus are also weighing, with impacts to the labor market from the Omicron variant potentially set to show in the final monthly jobs report for 2021.
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4:05 p.m. ET: Stocks end the first session of 2022 with record closing high: S&P 500 gains 0.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, Nasdaq jumps 1.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
Here were the main moves in markets as of 4:05 p.m. ET:
S&P 500 (^GSPC): +30.38 (+0.64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,796.56
Dow (^DJI): +246.76 (+0.68{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 36,585.06
Nasdaq (^IXIC): +187.83 (+1.20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,832.80
Crude (CL=F): +$0.79 (+1.05{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $76.00 a barrel
Gold (GC=F): -$25.50 (-1.39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,803.10 per ounce
10-year Treasury (^TNX): +11.6 bps to yield 1.6280{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
1:28 p.m. ET: Treasury yields climb, 30-year yield rises above 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the first time since November
The U.S. Treasury yield curve steepened on Monday as bonds on the long end of the curve rose markedly.
The 30-year yield jumped by nearly 14 basis points around 1:30 p.m. in New York to top 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the first time since November, and the benchmark 10-year yield broke above 1.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the first time in more than one month.
—
12:08 p.m. ET: Apple shares gain alongside broader tech rally, as iPhone-maker nears $3 trillion market cap
Shares of heavily weighted tech stock Apple (AAPL) gained more than 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in intraday trading on Monday, helping lead the Nasdaq’s more than 0.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} rise during the session.
The iPhone-maker closed in on the $3 trillion market capitalization mark, and would need a share price of $182.86 apiece to reach that level. The stock gained nearly 34{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} during 2021, outpacing the broader market.
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11:00 a.m. ET: U.S. construction spending rises for ninth straight month in November as homebuilding picks up
Domestic spending on construction rose for a ninth straight month in November, helped in large part by a pick-up in residential home construction.
Construction spending in the U.S. rose at a 0.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} monthly clip in November, the Commerce Department said on Monday. This matched October’s rate, which was in turn upwardly revised from the 0.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} monthly increase previously reported.
Private construction led the gain for November, with this spending up 0.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and. residential construction spending alone jumping by nearly 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. However, public construction project spending declined by 0.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. during the month, weighed down by a 0.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} decrease in outlays by the federal government.
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10:01 a.m. ET: Final December Markit U.S. manufacturing PMI revised down as shortages weigh on growth
IHS Markit’s final December U.S. purchasing managers’ index for the manufacturing sector came in slightly lower than previously reported the final monthly print, reflecting supply-side shortages still weighing on goods-producing industries.
The headline PMI ticked down to 57.7 for December from the 57.8 previously reported. This marked the lowest print in a year. Readings above the neutral level of 50.0 indicate expansion in a sector.
“December saw another subdued increase in U.S. manufacturing output as material shortages and supplier delays dragged on,” Sian Jones, senior economist at IHS Markit, said in a press statement. “Although some reprieve was seen as supply chains deteriorated to the smallest extent since May, the impact of substantially longer lead times for inputs thwarted firms’ ability to produce finished goods yet again.”
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9:58 a.m. ET: When looking at year-end price targets, ‘you shouldn’t be looking for the exact number’: Strategist
With Wall Street strategists having cast their expectations about where the stock market is likely to end the year, investors should consider not so much firms’ exact price targets, but their commentary around current market conditions, according to at least one strategist.
“When it comes to outlooks, there’s something that I tend to think and that is, obviously everybody is putting these out for just a general thought,” Michael Antonelli, Robert W. Baird & Co. strategist, told Yahoo Finance Live on Monday. “And honestly when you read an outlook, you shouldn’t be looking for the exact number because obviously that is a tough number to pick. What you want to be looking for is how that person thinks about the market and how they think about the economy.”
“When I think about the market and economy right now, I think about momentum,” he added. “Momentum is one of the most durable factors when it comes to the stock market … we have a lot going for us right now.”
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9:30 a.m. ET: Stocks open higher
Here’s where markets were trading just after the opening bell:
S&P 500 (^GSPC): +19.45 (+0.41{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,785.63
Dow (^DJI): +81.85 (+0.23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 36,420.15
Nasdaq (^IXIC): +114.00 (+0.75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,761.93
Crude (CL=F): -$0.74 (+0.98{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $74.47 a barrel
Gold (GC=F): -$19.70 (-1.08{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,808.90 per ounce
10-year Treasury (^TNX): +9.3 bps to yield 1.591{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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7:45 a.m. ET Monday: Stock futures look to open near records
Here’s where markets were trading ahead of the opening bell Monday morning:
S&P 500 futures (ES=F): +27 point (+0.57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,785.50
Dow futures (YM=F): +166.00 points (+0.46{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 36,392.00
Nasdaq futures (NQ=F): +110.75 points (+0.68{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 16,431.50
Crude (CL=F): +$0.32 (+0.43{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $75.53 a barrel
Gold (GC=F): -$6.20 (-0.34{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,822.40 per ounce
10-year Treasury (^TNX): +3.5 bps to yield 1.463{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
Photo by: NDZ/STAR MAX/IPx 2021 12/28/21 People walk past the New York Stock Exchange during afternoon trading on December 28, 2021 in New York.
A number of catalysts poised to converge in 2022 will give a lift to global sustainable and ESG assets next year, according to a recent note from Jefferies.
“We are seeing 2022 as the year when ESG not only becomes mainstream, but it starts driving markets a lot more,” Jefferies Global Head of ESG and Sustainability Research Aniket Shah said on Yahoo Finance Live (video above). “And the reason why this will happen is because core parts of the financial system, including the central banks, are going to become even more serious about climate change as they are today.”
The market for ESG funds set a record in 2020 and continued to grow in 2021, especially in a robust first quarter. In total, an estimated $120 billion have flowed into ESG exchange-traded funds this year.
U.S. Sustainable Fund Flows as of September 20, 2021. (Source: Morningstar)
In 2022, the velocity of ESG investing is likely to continue with 11 catalytic events propelling the market, according to Jefferies analysts. A majority of the catalysts fall under policy and regulatory changes as national governments and central banks get serious about climate change and decarbonization targets.
“We’ve seen a lot of action, frankly, on the fiscal side — globally, not necessarily in the U.S. — on renewables and on energy,” Shah said. “We can expect more of that here in the States next year. And I think all around the world, you’re going to see more involvement from central banks, which will be a very nice one-two punch.”
The no. 1 catalyst for continued ESG momentum
2021 began with considerable optimism for ESG funds — and flows to boot — on the prospect of significant federal investment in climate adaptation with the incoming Biden administration and Democratic control of Congress.
In anticipation, renewable energy stocks and ETFs rallied hard throughout the second half of 2020. Invesco’s Solar ETF (TAN), for instance, rose over 230{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, reaching its peak on Jan. 1, 2020.
Barb and Gerald Bauer stroll along a row of solar panels on their farm near Faribault, Minn., on Aug. 20, 2021. (AP Photo/Jim Mone)
The Biden administration took one key step by rejoining the Paris Agreement and Congress passed the $1.2 trillion infrastructure bill. However, some of the optimism has been dampened as President Biden’s Build Back Better agenda — which would be the largest effort to address climate change in U.S. history — has all but ground to a halt.
“We see BBB passing in the first half of 2022, with a significant portion of the House-version being passed through the Senate,” the analysts wrote on Dec. 13, acknowledging that a delay from centrist Sens. Manchin (D-WV) and Sinema (D-AZ) would be likely. Should the bill eventually pass the Senate with climate provisions resembling the $555 billion allotted by the House-passed version, “this will provide medium-term tailwinds to renewables, EVs, and CCS-oriented companies.” (CCS refers to carbon capture and storage.)
Speaking before comments by Manchin left Build Back Better in a lurch, Shah stated: “The number one, and perhaps most important, catalyst for a continuation of this momentum around ESG is the reconciliation package here in the United States, the Build Back Better bill.”
From a global perspective, efforts to find a way forward for Biden’s social spending and climate investment plan are part of a larger trend that the analysts highlighted: greater decarbonization efforts in the U.S., Europe, and China, but declining international cooperation.
US President Joe Biden reacts during a meeting on “the Build Back Better World (B3W)”, as part of the World Leaders’ Summit of the COP26 UN Climate Change Conference in Glasgow, Scotland, on November 2, 2021. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
And while the shape of some of these policies will come down to midterm elections, in the U.S. and in France, for example, “we can expect a lot more of this happening not just in the United States, but all around the world, whether it’s the EU Green Deal, efforts that are underway in China and other major economies,” Shah said.
European countries have dominated when it comes to sustainable finance and green bond issuance, in particular. But despite a more laggard approach to sustainability rules, the U.S. may catch up anyway. As another strategist told Yahoo Finance Live recently, markets — not governments — will lead the way in the United States.
“The United States is really poised to go on its own journey and run its own race in 2022,” Aaron Franklin, head of sustainable finance at SMBC, said. “It’s a lot less of a policy-driven market in the United States and a lot more driven by what asset managers need to see, what banks need to see, and how companies can differentiate themselves. That’s distinguished from the European approach of having a bit more of a top-down, did this comply with the definition of sustainability.”
Green monetary policy
Central banks, too, could bolster the market for ESG assets as the institutions become “more forceful on green monetary policy,” according to the note.
“There are a whole bunch of policy instruments that central banks can play, whether it’s stress tests, whether it’s actual asset purchasing, differential treatment of green versus brown assets from a capital requirement perspective for banks,” Shah said. “We think next year is the year that this becomes mainstream and integrated in major central banks around the world.”
Among the biggest changes that 2022 could bring for ESG investing are new guidelines for disclosing climate-related risks, opportunities, and metrics. In the U.S., the SEC collected public comments on climate change disclosures between March and June 2021 and received more than 5,000 statements, with a majority in favor of more stringent disclosure requirements to clamp down on greenwashing (falsely portraying or providing misleading information about a company’s environmental efforts).
“We see the SEC endorsing mandatory climate disclosures in 2022 for implementation in 2023-2024,” the Jefferies analysts wrote, also predicting that “the SEC climate disclosures will loosely resemble the approach of the TCFD,” or the recommendations laid out by the Task Force on Climate-related Financial Disclosures.
Gary Gensler, Chair of the U.S. Securities and Exchange Commission, speaks with Senator Elizabeth Warren (D-MA) prior to testifying before a Senate Banking, Housing, and Urban Affairs Committee oversight hearing on the SEC on September 14, 2021, in Washington, DC. (Photo by Evelyn Hockstein-Pool/Getty Images)
Furthermore, the International Sustainability Standards Board (ISSB), a body announced at the 2021 COP26 summit in Glasgow by the International Financial Reporting Standards Foundation, could release a draft of global sustainable disclosures for financial markets in early 2022.
While the ISSB does not hold the authority to mandate disclosure requirements, it could establish a “comprehensive global baseline of sustainability-related disclosure standards” which other authorities and companies follow, the note said.
“We see the ISSB becoming the global standard-bearer of ESG disclosure in 2022,” the analysts wrote. “As more companies disclose ESG-related information based on ISSB, the standard will become the driver of materiality, just like with financial disclosures. We recommend investors become familiar with the ISSB approach in 2022.”
These standards could also prove to be an important driver of ESG alignment across disparate countries and jurisdictions. As the note emphasized, “the standards will be developed in such a way that they can be mandated and aligned with jurisdiction-specific requirements; it will be at the discretion of jurisdictional authorities to decide whether to mandate the use of the standards.”
Demonstrators carry signs and flags at a Fridays for Future march during the UN Climate Change Conference (COP26), in Glasgow, Scotland, Britain, November 5, 2021. REUTERS/Yves Herman
‘A whole new era’ for ESG investing
While COP26 garnered global attention as world leaders, business executives, activists, and many others gathered in Glasgow to discuss decarbonization solutions, its biodiversity equivalent, COP15, received much less attention. That could change next year as the second phase of COP15 is expected to take place from April 25 to May 8, 2022.
The overarching theme for ESG investors: a broader approach to companies’ environmental frameworks beyond decarbonization.
A white pelican flies off a piling in open water where camps once stood on solid ground in Bay Adam in Plaquemines Parish, La., Wednesday, Nov. 3, 2021. (AP Photo/Gerald Herbert)
“We see biodiversity becoming the new ‘climate change’ in 2022 and the COP15 UN Biodiversity Conference being the catalyst for this moment,” the Jefferies analysts wrote. “This could signal a whole new era for the ESG-focused investor. We see 2022 as the year that natural capital becomes a focus for investors, and over the next 2-3 years as when the investor community becomes more involved in the risks and opportunities therein.”
With over half of global GDP relying moderately or heavily on nature, according to research from the World Economic Forum — plus the additional but unaccounted-for value it provides — preventing a mass extinction of species may increasingly become a necessary concern for investors.
The energy transition won’t take a back seat, however. “The general sentiment, though, from our team, the ESG team at Jefferies, is, 2022 will be a constructive year for the renewables play,” Shah said. “Over $130 trillion of capital from major financial institutions is now pledged towards financing the energy transition. To us, this is a structural tailwind for the sector, and we think that there will be many winners along the way.”
Grace is an assistant editor for Yahoo Finance.
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The S&P 500 closed at an all-time high on Monday — again.
For the second consecutive trading session, the index soared past its previous record as markets charged higher heading into the final week of 2021. All three major U.S. indexes gained in a promising sign for stock market bulls that a Santa Claus Rally is well underway.
At close, the S&P was up 1.38{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 4,791.19, while the Dow saw a 350-point jump to 36,302.38. The Nasdaq Composite also gained 1.39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, closing at 15,871.26.
The S&P’s move marked its 69th record close of the year after the index hit an intraday high in morning trading, up even as COVID-19 cases rise.
The year-end Santa Claus Rally — one in which stocks climb higher in the final five trading sessions of a year, plus the first two trading days of the new year — is building momentum. For reasons unclear, over the past 92 years, the S&P 500 gained 77{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the time during the year-end rally period, according to data from Sundial Capital Research. The average gain in this seven-day trading period tallied 2.66{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
The market will head into 2022 with several key considerations to weigh but with its biggest focus on the course of the pandemic and rising inflationary pressures as well as on measures the Federal Reserve could take in response.
“Inflation and Omicron are the two most important catalysts for the stock market right now,” APAC CEO at Qraft Technologies Francis Oh told Yahoo Finance. “I think that those catalysts are priced in through the market volatility… still I think the market will cautiously move off.”
Merck (MRK) received authorization last week from the U.S. Food and Drug Administration for its at-home COVID-19 drug, just one day after Pfizer (PFE) was also approved for use of its own treatment.
The pill developed by Merck in conjunction with Ridgeback Biotherapeutics, called molnupiravir, was shown to reduce hospitalizations and deaths by around 30{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in clinical trial data. Pfizer’s pill was reported to be 90{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} effective at preventing hospitalizations and deaths in high-risk patients.
“One of the ways pandemics end is significant mutation of the virus. It looks like Omicron may be our friend in that regard, significant mutations different enough from the parent that it doesn’t make people as sick,” True Health Initiative President Dr. David Katz told Yahoo Finance Live.
Investors processed a trove of economic releases ahead of the holiday weekend.
The Labor Department reported that initial jobless claimstotaled 205,000, sustaining a downward trend from the highs of their pandemic peak and reflecting labor market tightness brought on by a demand for workers heading into the new year. The latest print brings the four-week moving average for new claims to its lowest in 52 years, ticking up by 2,750 week-over-week to reach 206,250.
Meanwhile, U.S. consumer prices accelerated at the fastest pace in nearly four decades as shoppers confront rising inflation levels ahead of the holidays.
“Workers have a lot of power, and that’s likely to result in continued wage gains,” Girard chief investment officer Timothy Chubb told Yahoo Finance. “What worries us from an inflation standpoint is, at what point do we potentially see some of those inflation risks sort of hand the baton to the labor market?”
Meanwhile, November sales of new U.S. homes jumped 12.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to a seven-month high of 744,000, buoyed by low mortgage rates and higher demand in the housing industry.
U.S. durable goods orders rose by 2.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in November, up from the prior month, boosted by a sharp rise in aircraft orders.
“We’ve been saying that this is definitely a buy the dip sort of market because we expect more earnings upgrades to come,” Anik Sen, PineBridge Investments global head of equities told Yahoo Finance Live. “We think that the real debate should be about the length and strength of the economic cycle ahead.”
4:15 p.m. ET: Apple tip-toes around $3 trillion valuation
Shares of Apple Inc. (AAPL) closed 2.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} higher at $180.33 a piece, bringing the stock to a new record close.
The gains added more than $66 billion to the company’s market capitalization, bringing it up to $2.96 trillion, according to Bloomberg data.
Apple’s climb comes on a positive day for the broader tech sector and strong day for markets overall.
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4:00 p.m. ET: S&P sees another record closing high
Here’s how markets closed out the trading session ET:
S&P 500 (^GSPC): +65.55 (+1.39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,791.34
Dow (^DJI): +352.21 (+0.98{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 36,302.77
Nasdaq (^IXIC): +217.89 (+1.39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,871.26
Crude (CL=F): +$1.90 (+2.57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $75.69 a barrel
Gold (GC=F): +$0.90 (+0.05{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,812.60 per ounce
10-year Treasury (^TNX): -1.2 bps to yield 1.4810{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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2:28 p.m. ET: Fauci says U.S. should implement vaccine mandate for domestic travel
The nation’s top infectious disease expert Dr. Anthony Fauci said the United States should “seriously” consider requiring COVID-19 vaccines for domestic flights during an appearance Monday morning on MSNBC’s “Morning Joe.”
“When you make vaccination a requirement, that’s another incentive to get more people vaccinated,” he said. “If you want to do that with domestic flights, I think that’s something that seriously should be considered.”
The statement comes as the recent Omicron-driven wave spurs flight cancellations across the country, driven mostly by staff shortages caused by the virus. More than 1,000 U.S. flights were canceled Monday as of 1 p.m. ET, according to Bloomberg.
Airline stocks remained in the red during midday trading, with American Airlines (AAL) down 0.58{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $18.16 per share, United Airlines (UAL) falling 0.89{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $44.47 a piece, and Delta Air Lines (DAL) ticking 0.98{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} down to trade at $38.92 per stock.
“If the stocks are down, now is the time to buy,” DLB Financial Services CEO Debbie Boyd told Yahoo Finance Live as she discussed airline companies. “Think of those stocks being down as on sale.”
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12:17 p.m. ET: Markets edge higher during intraday trading
Here’s how stocks were trading in the midday session ET:
S&P 500 (^GSPC): +48.18 (+1.02{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,773.97
Dow (^DJI): +230.93 (+0.64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 36,181.49
Nasdaq (^IXIC): +174.28 (+1.11{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,827.65
Crude (CL=F): +$1.99 (+2.70{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $75.78 a barrel
Gold (GC=F): -$1.20 (-0.07{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,810.50 per ounce
10-year Treasury (^TNX): -1.2 bps to yield 1.4810{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
11:41 a.m. ET: Tesla climbs towards biggest four-day gain since March
Shares of Tesla jumped 3.52{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $1,104.55 a piece, leading most of its peers in the electric vehicle space and approaching the company’s best four-day streak of gains since March.
Among other stocks in the sector, Lucid Group (LCID) gained 1.30{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in intraday trading to $38.13 per share, Nikola (NKLA) was flat, trading at about $11.09 a piece, and Canoo (GOEV) was down 2.64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $8.28 per share. Rivian (RVN) was up 5.73{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $102.39 per share.
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9:53 a.m. ET: Airline stocks descend following weekend of cancellations
U.S. travel stocks slumped in early trading after major airlines reported hundreds of cancellations and delays amid staffing shortages caused by an uptick of COVID-19 cases among crews and personnel.
More than 2,800 flights were disrupted over the Christmas weekend, caused by the latest coronavirus wave and inclement weather from a winter storm in the northwestern part of the country.
American Airlines (AAL) dropped -2.70{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $17.77 per share at market open. United Airlines (UAL) and Delta Air Lines (DAL) each tumbled 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $44.01 and $38.47 per share, respectively.
Cruise ship operators also took a hit, with Carnival Corp. (CCL) sinking 3.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $20.45 per share, Royal Caribbean Cruises (RCL) down 3.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $77.07 per share and Norwegian Cruise Line Holdings (NCLH) trading down 4.14{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $21.78 per share.
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9:30 a.m. ET: Markets open higher heading into final trading week of 2021
Here were the main moves at the start of the trading session ET:
S&P 500 (^GSPC): +11.51 (+0.24{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,737.30
Dow (^DJI): +61.77 (+0.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 36,012.33
Nasdaq (^IXIC): +131.47 (+0.85{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,653.37
Crude (CL=F): -$0.25 (-0.34{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $73.54 a barrel
Gold (GC=F): -$1.50 (-0.08{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,810.20 per ounce
10-year Treasury (^TNX): -1.2 bps to yield 1.4810{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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7:10 a.m. Monday ET: Futures inch higher after Christmas weekend
S&P 500 futures (ES=F): +8.00 (+0.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,723.75
Dow futures (YM=F): +13.00 points (+0.04{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 35,845.00
Nasdaq futures (NQ=F): +39.50 points (+0.24{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 16,338.50
Crude (CL=F): -$1.07 (-1.45{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $72.72 a barrel
Gold (GC=F): -$4.80 (-0.26{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,806.90 per ounce
10-year Treasury (^TNX): -0.09 bps to yield -0.07{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
Correction: The year-end Santa Claus Rally is when stocks climb higher in the final five trading sessions of a year, plus the first two trading days of the new year. The number of days was misstated in an earlier version of this article.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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Ford not long ago produced its 2022 Searching More with Ford (F) report, marking the 10th year the legacy automaker has surveyed worldwide customers to discover traits among the important demographics. In accordance to Ford Chief Futurist Sheryl Connelly, local climate and environmental problems continue to be at the major of consumers’ minds.
“So it can be definitely ‘climate, weather, weather,’” Connelly informed Yahoo Finance Stay. “We have been accomplishing this report for a number of yrs, and what we found is that in modern decades 67{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of individuals that we speak to even before COVID were telling us that they were overwhelmed by modifications having area in the earth.”
She described the confluence of the COVID-19 pandemic, polarized politics, and weather transform issues as a “low-quality fever of worry” that buyers have been living with for the previous yr. Heading into 2022, Ford identified that 81{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of persons surveyed from 15 unique nations around the world nonetheless cited weather change as their prime worry.
Ford also uncovered that in 2021, 70{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of folks surveyed all over the world reported that they have been actively transforming their actions to struggle local climate change. Nonetheless, a handful of years prior, they observed that only 48{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Individuals explained they were ready to get on sustainability initiatives if the inconvenience to them was “small or non-existent.”
Connelly spoke to the American sentiment bordering sustainability as it pertains to electrical cars.
“And I imagine that’s truly the most significant essential below, is that folks want to do their portion but they want to make it practical,” Connelly said. “They want to make guaranteed that they are not nervous about the length of the cost, the charging variety they’ll get, and that there’ll be possibilities for them to demand.”
An all-electric F-150 Lightning on display screen at the Motor Bella event in Pontiac, Michigan on September 21, 2021. – The North American International Auto Clearly show (NAIAS) did not keep its 2021 car exhibit as prepared owing to Covid-19 considerations but as a substitute, they are internet hosting an car-centric event referred to as Motor Bella. (Image by JEFF KOWALSKY / AFP) (Image by JEFF KOWALSKY/AFP via Getty Pictures)
The EV drive
With Ford saying that it intends to ramp up its EV output to 600,000 by 2023 — the corporation expects EVs to comprise 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the global motor vehicle blend by 2030 — its tendencies report was intrigued in surveying customers about their views on issues surrounding the adoption of EVs.
“We did check with folks close to the earth when [they] think charging stations will outnumber the number of petrol stations in the earth 13{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Individuals mentioned that will materialize by 2030 … But if you appear to a put like Germany, 34{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the people reported it’s going to occur by the conclusion of the decade,” Connelly mentioned.
She cited authorities dedication ranges as remaining the key cause behind this distinction in consumer sentiment. For instance, the German federal government proceeds to revamp its incentive payments for buyers of electrical and hybrid automobiles and necessary every single gasoline station in the place to install electrical motor vehicle charging stations as portion of its 130 billion euro pandemic stimulus strategy again in June 2020.
In accordance to Conelly, the crucial to catalyzing the EV force is exhibiting individuals that goods like the Mustang Mach-E, the Ford F-150 Lightning, and the Ford E-Transit van can supply on the identical level as a V6 or V8-run car or truck, and that there does not will need to be a trade-off among “mileage and muscle.”
To that stop, Connelly mentioned how the F-150 Lightning was ready to gain goodwill from the folks of Texas through the winter season storms in February 2021 by means of its onboard generator.
“Our area sellers dispatched F-150 Lightnings into the neighborhood to help folks get power back into their homes. And I imagine all those alerts definitely get started to transform your anticipations about what a motor vehicle can do for you,” she stated.
Thomas Hum is a author at Yahoo Finance. Observe him on Twitter @thomashumTV
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