At the time of writing, the major stock indexes are on track to post robust gains in December, capping a solid year for the market. Despite some big swings in 2021, at the time of writing, the S&P 500 is on pace to gain more than 27%. That would put it better than 2020 but not as much as 2019 which was also a super year for the stock market. The heikin ashi chart of the S&P500 shows just how strong the uptrend has been during 2021.
Worth a mention is the crypto market which started with optimism and expectations for the Big Daddy, bitcoin at $100K but those hopes soon faded. IMHO, I think with rising inflation and interest rates, crypto investors are putting money into cash and away from more speculative investments. This might be counterintuitive but with the floatation of Coinbase, I’m taking this as a positive sign for the crypto markets, they’re maturing as an asset class in their own right
This year, a surge in consumer demand fuelled by the economy’s reopening boosted corporate profits more than expected, keeping investors in a buying mood. The Federal Reserve also aided by keeping interest rates low, making it easier for companies and consumers to borrow money.
The market’s gains occurred amid several economic challenges, including soaring inflation, global supply chain disruptions, and COVID-19 virus outbreaks with more contagious variants.
Concerns among investors about the Omicron variant have subsided in recent weeks after researchers said it appears to produce fewer severe symptoms and President Joe Biden avoided declaring travel or other restrictions that may stifle economic activity.
The number of people asking for unemployment benefits in the United States has dropped below 200,000, indicating that the job market is still solid following last year’s coronavirus slump.
During the week, cruise liners tumbled after the Center for Disease Control and Prevention advised that passengers avoid cruise travel, irrespective of their COVID-19 vaccination status while stocks in the healthcare and communication services industries saw gains.
Major Gain – Twitter (NYSE: TWTR)
After the microblogging service was named in a list of Internet investment recommendations for 2022 by Baird analyst Colin Sebastian, shares of Twitter Inc. soared as a result.
Twitter’s stock had dropped roughly 28% in the last six months as investors have shifted their focus away from high-growth technology businesses and toward companies with more dependable cash flows.
Major Loss – Norwegian Stock (NYSE: NCLH)
As reports of the Covid-19 outbreak, onboard running ships continue to rattle the cruise industry, shares of cruise operators have fallen. Lockdowns and aversion to travel, especially discretionary travel, have wreaked havoc on the cruise industry’s health.
Customers are beginning to cancel cruises, which has a similar effect on cruise stocks. Similarly, the airline business isn’t faring any better.
Thousands of domestic and international flights were canceled over the Christmas weekend as the number of new COVID-19 cases in the United States surpassed 197,000.
Although ships that have started cruising have increased coronavirus measures, the fast spread of the Omicron Variant of COVID-19 is thwarting their attempts. Because of coronavirus infections on board, “dozens” of ships are now “under investigation or being monitored by the CDC.”
US Commodity Market
Live Cattle Futures
Live cattle futures on the Chicago Mercantile Exchange dipped due to profit-taking after a previous session rally saw many contracts achieve fresh highs, dealers said.
CME February live cattle LCG2 closed at 139.975 cents per pound, down 0.750 cents. Feeder cattle futures rose 0.950 cents to 169 cents per pound, helped by a drop in Chicago corn futures Cv1. Spot January feeders FCF2 rose 0.450 cents to 166.325 cents.
According to traders, cash cattle prices were stable, selling at $140 to $141 per hundredweight (cwt), up, $2 to $3 from the previous week. The United States Department of Agriculture (USDA) recorded a top cash cattle price of $142.50 as of December end.
Wholesale boxed beef prices declined 65 cents per cwt, according to USDA, with quality cuts falling 65 cents to $265.06 per cwt and select cuts rising 80 cents to $257.89 per cwt.
According to livestock marketing consultancy service HedgersEdge, profit margins for beef processors fell marginally to $234.50 per head of cattle from $234.60 this week but remained well over $203.20 a week ago.
On the hog front, CME lean hog futures fell as well. The benchmark February hog contract closed at 82.700 cents per pound, down 1.125 cents.
Raw Sugar Futures
Raw sugar futures on ICE fell 1.7% as further rain fell in Brazil’s producing areas, reducing export activity, while robusta coffee stayed just below a recent 10-year high.
On ICE, March raw sugar SBc1 fell 0.32 cents, or 1.7 percent, to a week-low of 18.78 cents per pound, owing to reports of more rains in producing areas of Brazil and lower export activity.
Dealers said that rains in Brazil had improved soil moisture levels in important growing zones, as well as the forecast for the cane crop next year.
They also highlighted a drop in export activity, citing a 20% drop in shipments from Brazil compared to the same period the previous year.
Chinese imports were constrained, according to analyst Claudio Covrig, because local prices in China were lower, reducing refining margins. The quota arbitrage for sugar imports is closed, he stated. Sugar prices have been volatile this year and a strategy using price breakouts, chart patterns, or more offbeat strategies like butterfly harmonics would have been, potentially, profitable.
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