The Long and Short of it, week ending 28 Jan 2022
Posted:An extremely volatile week for U.S. stock markets with the Dow Jones Industrial Average swinging from down 1000 points (-3.3%) to close up 100 pts (0.3%) on Monday. Uncertainty surrounding the 2-day FOMC meeting (beginning Tuesday and ending Wednesday) drove market performance as investors battled hawkish versus dovish outcomes. The FOMC announcement, leaving rates unchanged but strongly intimating rate hikes will begin in March followed by a possible balance sheet reduction soon afterwards, squelched a 2%-3% rally in all three major stock indexes, leaving them slightly lower to unchanged on the day. Tightening concerns, heightened by Thursday’s better than-expected GDP release, moved markets lower Thursday only to see those concerns erased Friday with as-expected PCE Price and Employment Cost Index numbers, lifting the three major indexes 2%- 3% higher. The 10-year U.S. Treasury rate was also volatile, climbing 10bps through Thursday on aggressive-tightening concerns and then falling the remainder of the week to end unchanged. The U.S. dollar strengthened significantly last week, mainly as a result of Wednesday’s FOMC announcement. At week’s end, the S&P 500 Index increased 0.8% to 4,431.85, the Nasdaq Composite Index was practically unchanged at 13,770.6, the Dow Jones Industrial Average rose 1.3% to 34,726.20, the 10-year U.S. Treasury rate increased 1bp to 1.78% and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) strengthened 1.7%.
For More Detail read the following PDF.
The Long and Short of it, week ending 28 Jan 2022
