LEAP Wealth Management

The markets rallied last week apparently shrugging off any Omicron variant concerns. The Dow Jones led the pack with most of the gains being made in the first couple of days. The S&P managed to climb within 1% of its most recent all-time high.

All 11 sectors of the S&P 500 Index were in the green adding back more than 2% each.

While the markets rallied, not all news was encouraging. The weekly jobless claim fell, hitting numbers not seen in 52 years, signs of a tight labor market are showing. Unemployment is still high based on the BLS Non-Farm Payroll numbers.

The Federal Reserve is now trying to distance itself from the term “transitory” they placed on inflation earlier this year. Inflation is at a 39-year high and likely going to stay for a while. The Fed may have its hands tied with their ability to “influence” the economy.

At Leap Wealth, we hope everyone can take some time this holiday season to just sit back and focus on friends and family.

Overall gains hid the volatility last week. The returns in the S&P 500 Sectors were all over the place but recovered enough to be within 2% of its all-time high.

The major headline was concern about China’s Evergrande debt, which hung over the markets for most of the week. Fed Chair Jerome Powell downplayed those concerns though saying it was normal for an emerging market to have considerable debt loads. The FOMC Dot Plot showed some possibility of rate increases in early 2022, earlier than previously indicated, and could be viewed as a positive to the markets but only time will tell.

The yield curve steepened last week with rates rising and the 30-year treasury yield went above 2% after spending most of the 3rd quarter below that level. This will likely have a negative impact on some equity positions.

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