Three Things to Know & Watch – Dec 20, 2021

By Bill Hornbarger, Chief Investment Officer

Three Things to Watch

  • This will be a shortened trading week. Friday is a holiday since Christmas falls on Saturday. Typically, Christmas Eve is a half day of trading for stocks. Trading is expected to be quiet.
  • Economic reports out this week include readings on housing (new and existing home sales), consumer confidence (Consumer Confidence from the Conference Board and University of Michigan Consumer Sentiment) and inflation (personal consumption expenditures deflator). Home sales are expected to be up slightly, consumer confidence stable, and prices higher. The core PCE deflator is the Fed’s favored measure of inflation.
  • The spread of the new coronavirus variant and policymakers’ responses to it will be top of mind. The weekend featured news of omicron spreading and affecting everything from sports to business to academia. Some cities and businesses have started to restrict access again as the new variant appears to be more contagious.

Three Things to Know

  • Four in 10 COVID-19 patients are asymptomatic carriers of the virus responsible for over 800,000 deaths in the United States, a new study warns. Researchers from China say a global study of almost 30 million people found “silent” cases of the virus  are twice as prevalent than previous estimates feared. The results show 40.5 percent of the confirmed cases of the illness are among people who show no symptoms of the infection at all. Rates rose among certain groups including pregnant women (54%), air and cruise travelers (53%), and care home residents or staff (48%). (Source: studyfinds.org)
  • The Christmas Price Index shows the current cost of gifts given in the song “The Twelve Days of Christmas.” In 2021, the Christmas Price Index (CPI) in the U.S amounted to $41,205.58. That’s 5.7% growth compared to 2019 ($38,993.59). (Source: PNC, Capital Counselor)
  • The term Santa Claus rally was coined in the early 1970s by a stock market analyst who noticed a pattern of higher market returns between the first trading session after Dec. 25 and the first two trading sessions of the new year. Though past results can never guarantee future performance, the data seems to support that rallies during these time periods happen more often than not. Since 1950, the S&P 500 has gained an average of 1.3% during Santa Claus rally periods, according to The Stock Trader’s Almanac. Since the launch of the SPDR S&P 500 ETF Trust (SPY) in 1993, the Santa Claus rally has produced gains 18 out of 27 times, or about two-thirds (67%) of the time. (Source; Investopedia)

 

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.