Big earnings reports are due in from Alphabet, AbbVie, Amazon, Ford Motors, and Starbucks. The economic calendar includes the January jobs report, which could surprise due to the large number of hourly workers who were caught up by Omicron quarantines during the month. The unemployment rate is expected to hold steady at 3.9%.

Nearly $1T of U.S. private equity deals were announced in 2021, including buyouts and exits, which is 2.5x the volume of the previous year and more than double the previous peak in 2007. Big leveraged buyouts are continuing apace this year as well, with private equity firms Elliott Management and Vista Equity nearing an agreement to purchase Citrix Systems for about $13B. The company makes software that allows employees of companies to access their network remotely, among other cloud computing capabilities.

With one day to go, January is shaping up to be the worst month for stocks since the beginning of the pandemic. As it stands, the S&P 500 is down 7 percent this month, making it the fourth-worst January since at least 1928, according to S&P Dow Jones Indices.

Homebuying in the U.S. slowed down in the final month of 2021.  Pending home sales, a leading indicator of the health of the housing market, fell for the second straight month in December and was far slower than economists anticipated. The National Association of Realtors’ Pending Sales Index, which tracks the number of homes that are under contract to be sold, dropped 3.8% in December from November and declined 6.9% from the same month a year ago. Activity was down across all regions in the U.S.

Apple reported their largest single quarter in terms of revenue ever, with sales growing over 11% despite supply challenges and the lingering effects of the pandemic.  Apple beat analyst estimates for sales in every product category except iPads. Profit was also higher than expectations. Apple stock traded higher on the news.

The personal consumption expenditures index, the Fed’s preferred inflation gauge, came in at 5.8 percent in December, up from 5.7 percent the prior month. That beat out the prior month to become the fastest pace since 1982.

The Federal Reserve provided the clearest hint yet that it could start raising interest rates as soon as March in their press conference yesterday.  Fed Chairman Jerome Powell said asset purchases also are likely to halt in March, and the central bank released a paper outlining principles to start “significantly reducing” the bond holdings on their balance sheet.

Rising interest rates are causing big headaches for mortgage lenders, especially those who depend most on refinance business. Demand is simply drying up. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 3.72% from 3.64%.  As a result, mortgage refinance applications, which are highly sensitive to daily rate moves, fell 13% for the week and were 53% lower year over year, according to the Mortgage Bankers Association. Rates have now been moving higher for five straight weeks.

The U.S. economy grew at a much better than expected pace to end 2021 from sizeable boosts in inventories and consumer spending despite signs that though the acceleration likely tailed off towards the end of the year.  Gross domestic product, the sum of all goods and services produced during the October-through-December period, increased at a 6.9% annualized pace. The increase was well above the unrevised 2.3% growth in the third quarter.

U.S. consumer confidence ebbed slightly in January, with more consumers planning to purchase homes, automobiles and other big- ticket items even as they grew less optimistic about business and labor market conditions in the short term.  The survey from the Conference Board on Tuesday also showed consumers' inflation expectations moderating for a second straight month, though still high. Labor market views softened a bit, likely reflecting the disruptions on businesses caused by the winter wave of COVID.

The International Monetary Fund has downgraded their global growth forecast for this year as rising Covid cases, supply chain disruptions and higher inflation hamper the economic recovery.  In their World Economic Outlook report, published yesterday, the IMF said they expect global gross domestic product to weaken from 5.9% in 2021 to 4.4% in 2022 — with this year’s figure being half a percentage point lower than previously expected.

Shares of General Electric fell more than 6% after the company missed revenue estimates for their fiscal fourth quarter. The conglomerate reported 92 cents in adjusted earnings per share on $20.3 billion in revenue. Analysts were looking for 85 cents on $21.53 billion of revenue. The company said supply chain issues weighed on their sales.

Even as the housing market entered its traditionally slower season in November, home prices showed big gains from a year ago.  Prices rose 18.8% year over year on the S&P CoreLogic Case-Shiller National Home Price Index. Yet that was a slower rate than the October pace, which was a 19% annual gain.

A forward-looking gauge of the economy’s health rose 0.8% in December, the according to the Conference Board.  The organization’s Leading Economic Index now stands at 120.8, following a 0.7% increase in November. The move is consistent with many reports that foresee steady, if slower, growth ahead for the economy.  The U.S. LEI ended 2021 on a rising trajectory, suggesting the economy will continue to expand well into the spring.  The Conference Board forecasts GDP growth for Q1 2022 to slow to a relatively healthy 2.2% percent (annualized).  For all of 2022, they forecast the US economy will expand by a robust 3.5 percent – well above the pre-pandemic trend growth.

The average rate on the popular 30-year fixed mortgage hit 3.7%, according to Mortgage News Daily. That is the highest since early April 2020 and now 83 basis points higher than the same time one year ago.  Rates are reacting to surging bond yields, as financial markets react to swifter and more aggressive monetary policy tightening by the Federal Reserve.

As it looks to keep up with global financial innovation, and preserve dollar supremacy, the Federal Reserve has finally released a long-awaited paper discussing the pros and cons of a potential U.S. central bank digital currency. While the 40-page document doesn't take a stance on any specific policy, it will open the discussion between the central bank and stakeholders, as well as solicit public comment. Some upsides include faster and safer payment options, though risks like privacy protection and financial stability would have to be addressed.

Fears of a Netflix slowdown sent shares cratering 20% AH on Thursday, erasing $45B of market value as investors prepare for a new phase of slower growth. While the streaming giant beat on both the top and bottom lines, and reported just over 8mm global paid net subscriber additions in Q4, its guidance is what really hit sentiment. It would also mark the slowest start to a new year for the company in at least a decade.

Things don't appear to be getting better for the Nasdaq, which fell deeper into correction territory on Thursday, and is now down nearly 5% this week.  Peloton, the once-celebrated pandemic favorite is temporarily halting production of its connected fitness products due to slowing demand. Shares of Peloton plunged on the news, falling 24%, below its IPO price.

Technology stocks are officially in correction territory after yesterday's late Wall Street selloff. The tech and growth focused Nasdaq 100 fell more than 1% in the previous session, bringing the decline from its high to 10.2%, the typical definition of a correction. By comparison, the S&P 500 is down 6%.

Joe Biden backed the Federal Reserve’s shift towards tighter monetary policy to fight inflation, using his first formal press conference in months to defend his handling of the economy.  In a contradictory stance, he also argued for more deficit spending, but he acknowledged that his $1.75tn flagship “Build Back Better” legislation would probably have to be broken up into pieces to pass Congress.  The President noted the widespread concern among people about the enduring pandemic and the messy economic recovery.

Wall Street’s leading banks increased pay by nearly 15 per cent last year as they fought a war for talent that is expected to drag on as long as dealmaking remains buoyant. JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America disclosed in recent days that they had handed out $142bn in pay and benefits in 2021, up from $124bn in 2020.

Us Stocks sold off yesterday as yields in the bond market hit a 2 year high, while the price of oil hit a 7 year high.

Builders in the single-family housing market are facing growing expenses, which is causing a turnaround in sentiment to start the year.  Builder confidence fell one point to 83 in January, according to the National Association of Home Builders. Anything above 50 is considered positive, but that is the first drop in four months. The index also stood at 83 in January 2021.  “Higher material costs and lack of availability are adding weeks to typical single-family construction times. “NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19% since December 2020.”

Microsoft announced plans to buy video game giant Activision Blizzard in a $68.7 billion all-cash deal.  The price means Microsoft will pay $95 per share for Activision. Shares of Activision soared 27% following the news while Microsoft’s stock fell less than 1%. This would be Microsoft’s largest acquisition to date, followed by its purchase of LinkedIn in 2016 for $26.2 billion.  Activision, which is known for popular games such as Call of Duty and Tony Hawk’s Pro Skater, has been mired in controversy for the last several months after reports of sexual misconduct and harassment among the company’s executives. On Monday, Activision said it fired dozens of executives following an investigation.

Earnings for S&P 500 companies are expected to rise 22.4% in the fourth quarter, according to data from Refinitiv, which would wrap up a record year where overall earnings soared around 49%. Meanwhile, 26 S&P 500 firms have already reported Q4 results, with 77% of them posting bottom-line results that beat analyst expectations. Reporting this week is Goldman Sachs, Bank of America, UnitedHealth, Procter & Gamble, Netflix, and Honeywell.

Fresh data out of China has shown economic growth slowing to a 4% pace in the fourth quarter, from 4.9% Y/Y growth in the Q3, weighed down by property market crisis and new coronavirus outbreaks. While that exceeded economists' forecasts, it was short of the 6.5% growth recorded over the same period in 2020.  Following the data, the People's Bank of China cut key interest rates for the first time since the peak of the pandemic in 2020.

Oil prices have breached $87 a barrel and hit a more than seven-year high, threatening to propel global inflation higher. The price for Brent crude, the international oil benchmark, was up 1.3 per cent to $87.63 a barrel, the highest since October 2014. West Texas Intermediate, the US benchmark, which has risen more than 13 per cent since the start of year.

According to the Commerce Department Retail Sales fell much more than expected in December as surging prices took a big bite out of spending.  Excluding autos, retail sales fell 2.3%.  Considering that the sales numbers are not adjusted for inflation, the data point to a slow ending to what had otherwise been a strong 2021 in which sales rose 16.9%.

Earlier in the week we got the inflation data at the consumer level showing inflation increasing by 7% year over year.  Yesterday we got the inflation rate at the wholesale, or producer level.  The producer price index, which measures prices received by producers of goods, services and construction, was up 0.2% for the month of December.  However, on a 12-month basis, the index was up 9.7% to end 2021, the highest calendar-year increase ever in data going back to 2010.

Shares of Ford jumped higher as the automaker’s market cap topped $100 billion for the first time ever. The rally comes as the company plans to increase electric vehicle production, including the Mustang Mach-E crossover and an upcoming electric version of their best-selling F-150 pickup. Deutsche Bank also named Ford one of their top 2022 stock pick.

Applications for U.S. state unemployment insurance rose unexpectedly for a second consecutive week to the highest in two months, suggesting that the recent surge in Covid-19 cases could be leading to dismissals.  Initial unemployment claims totaled 230,000 in the week ended Jan. 8, up 23,000 from the prior period.

US Consumer prices rose the most in 40 years in December on a year over year basis rising 7%.  Energy, shelter, vehicles, apparel, and household furnishings all saw double digit increases.  Inflation can be described as death by a thousand cuts as it slowly eats away consumers’ buying power.

Mortgage rates have moved to their highest level in almost 2 years, and that may have potential homebuyers nervous that their affordability window is closing faster than expected.  Home prices are still gaining, and winter is historically the slowest season for the housing market, but mortgage demand from buyers moved higher. This, as the average interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 3.52% from 3.33%, for loans with a 20% down payment. That is the highest rate since March 2020. It was 64 basis points higher the same week one year ago.

Federal Reserve Chairman Jerome Powell told Congress yesterday that if the pace of price increases do not come down, the central bank will get more aggressive with raising short-term borrowing costs.  Powell said “If we see inflation persisting at high levels, longer than expected, we will have to raise interest rates more over time.  Powell is facing the Senate for his renomination for a second term running the nation’s central bank.

Inflation rose at its fastest 12-month pace in nearly 40 years during December, according to a closely watched gauge from the Labor Department.  The consumer price index, a gauge that measures costs across dozens of items, increased 7%, according to the department’s Bureau of Labor Statistics. On a monthly basis, CPI increased 0.5%.

Shares of Boeing are higher after they reported sales and deliveries of new planes surged last year as customers looked beyond the pandemic’s toll on travel demand, but the manufacturer still ended 2021 behind chief rival Airbus.  Boeing handed over 340 jetliners to airlines and other buyers, up from 157 in 2020.  The deliveries were led largely by the 737 Max, which regulators worldwide had grounded for nearly two years after a fatal crash in 2018 and another in 2019.  The increase in deliveries was welcome news for Boeing, which has struggled in the wake of crashes, the pandemic and manufacturing issues.

U.S. wholesale inventories increased more than expected in December, suggesting that the restocking of warehouses likely contributed strongly to economic growth last quarter.  The broad increase in inventories reported by the Commerce Department also offered more hope that supply bottlenecks were easing.

High inflation is enemy No. 1 for the first time since 1981, small businesses say.  Some 22% of small-business owners said inflation is their top problem, according to the National Federation of Independent Business. That’s the biggest share in 41 years.  The yearly pace of U.S. inflation likely crossed the 7% mark in December, based on the consumer price index. The last time that happened was in early 1982.  Yet even as they struggle with high prices, small businesses also said they were slightly more optimistic. The NFIB’s small-business optimism index rose 0.5 points to a three-month high of 98.9.

Shares of the mobile gaming company Zynga soared more than 40% after Take-Two Interactive, another gaming company, revealed plans to buy Zynga for $12.7 billion, or $9.86 a share, in a cash and stock deal. That’s a roughly 64% premium to Zynga’s closing price Friday. Shares of Take-Two tumbled by 13.1%.

Stocks started the first trading week of 2022 lower with growth stocks sharply lower after interest rates rose when the Federal Reserve signaled they could dial back their easy monetary policy more aggressively than some expected. Minutes from the Fed’s December meeting showed the central bank is planning to shrink their balance sheet in addition to hiking rates.

Mortgage rates rose markedly in the first week of 2022 — potentially setting the tone for a year in which economist expect interest rates to move steadily higher.  The 30-year fixed-rate mortgage averaged 3.22%.  This is the highest level for the benchmark mortgage rate since May 2020.  The 15-year fixed-rate mortgage, meanwhile, rose 10 basis points to an average of 2.43%. 

According to the Federal Reserve U.S. consumer credit soared by $40 billion in December, more than double expectations.  That translated into an 11% annual gain — the largest move in a single month in 20 years.  Revolving credit, such as credit cards, rose at a 23.4% rate.  That’s the highest rate since April 1998.  The jump may reflect households using credit more freely. During the pandemic, many households curtailed their credit card debt or used stimulus funds to pay down balances.

The U.S. economy added far fewer jobs than expected in December just as the nation was grappling with a massive surge in Covid cases, the Labor Department said this morning.  Nonfarm payrolls grew by 199,000, while the unemployment rate fell to 3.9%, according to Bureau of Labor Statistics data. That decline came even though the labor force participation rate was unchanged at 61.9% amid an ongoing labor shortage in the U.S.

The current wave of pseudo-media consolidation is picking up speed following Vox's merger with Group Nine and BuzzFeed's purchase of Complex. The latest deal will see The New York Times (NYT) scoop up sports subscription site The Athletic for $550M, with the all-cash transaction expected to close in the first quarter. Also don't forget about Dotdash's acquisition of Meredith's National Media Group in October, as well as Axel Springer's purchase of Politico.

Uranium prices have jumped this week as violent protests in Kazakhstan stoke concerns about security of supply for the radioactive material used to fuel nuclear reactors. The metal was resurgent last year, rising by more than 30 per cent as investors bet nuclear energy will be a key part of the move away from fossil fuels and the electrification of the global economy.

A new era of monetary policy is starting to hit investors in the face after previously beliefs that any tightening would be limited and gradual. FOMC minutes released on Wednesday showed that officials were fully on board with a faster scale back of the central bank's asset purchase program, which would give it greater flexibility to raise interest rates.  Stocks tanked on the news, with the Nasdaq ending the day down more than 3% for the worst start to a calendar year since the financial crisis.  Investors are showing a preference for businesses that actually make money, a positive for us all.

Products worth $112B-$114B could be returned to U.S. retailers after the holiday season, up from $100B in 2020 and $95B in 2019, according to a forecast from liquidation inventory company B-Stock Solutions. UPS also estimates it will handle more than 60M return packages through Jan. 22, a 10% increase from the previous year.

Investors poured a record $330bn into private start-ups in the US last year, almost double the total from 2020, in a flurry of dealmaking that rapidly inflated company valuations and gave leverage to founders as venture capitalists competed with other deep-pocketed investors for deals.

The first trading day of 2022 resulted in a historic day for the U.S. stock market as Apple became the first company in history to reach a valuation of $3T. The tech giant crossed the market cap milestone in afternoon trading, with shares climbing nearly 3% to $182.88 apiece. Lifting investor confidence was the belief that Apple will keep launching best-selling products as it explores new markets like self-driving electric cars, augmented-reality glasses and possibly the Metaverse. The only other company that is currently in Apple's market cap ballpark is Microsoft, which has a valuation of $2.5T.

A federal jury late Monday convicted disgraced former Therano CEO Elizabeth Holmes on four of 11 counts that her once-hot biotech startup swindled investors out of hundreds of millions of dollars. The failed blood-testing firm was worth about $9B at its peak, reportedly giving Holmes a $4.5B net worth at the time, but was dissolved in 2018 after facing regulatory investigations.

Hedge funds gained 8.7 per cent on average during 2021, according to data provider HFR. That marks their third consecutive year of gains, but trails by some distance the US S&P 500 index’s 27 per cent total return over that period.