Deteriorating investor enthusiasm for high-valuation growth companies and a mixed start to the fourth-quarter earnings season made for a volatile week.
The Dow Jones Industrial Average lost 0.88%, while the Standard & Poor’s 500 slipped 0.30%. The Nasdaq Composite index fell 0.28% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 1.31%.1,2,3
Stocks were under pressure all week as investors grappled with higher bond yields and talk of possibly four rate hikes this year. Initially, intraday declines would bring out buyers and pare the losses. Investors were particularly heartened by Fed Chair Powell’s congressional testimony on Tuesday that softened the hawkish tone found in the minutes of the Federal Open Market Committee’s December meeting.
After digesting the hot inflation reports released mid-week, stocks were unable to resist the selling pressures on Thursday. A weak retail sales number, a resumption in the rise in yields, and mixed earnings from some of the big money center banks weighed on the market during Friday’s trading.
Inflation and the Fed
Inflation reports last week continued to reflect upward momentum in consumer prices. The Consumer Price Index posted a 7.0% year-over-year jump–the biggest increase since 1982, while the Producer Price Index rose 9.7% from a year earlier–the fastest pace since 2010 when the index was reconstituted.4,5
Markets responded calmly as both numbers were in the neighborhood of expectations and the monthly increase for each moderated from previous single-month increases. The price pressures are expected to remain in the face of continuing supply chain constraints and wage growth. The pace and persistence of price increases may influence the speed at which the Fed may tighten in the year ahead.
This Week: Key Economic Data
Wednesday: Housing Starts.
Thursday: Jobless Claims. Existing Home Sales.
Friday: Index of Economic Indicators.
Source: Econoday, January 14, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: The Goldman Sachs Group, Inc. (GS), The Charles Schwab Corporation (SCHW), J.B. Hunt Transport Services, Inc. (JBHT)
Wednesday: Bank of America (BAC), UnitedHealth Group, Inc. (UNH), The Procter & Gamble Company (PG), Morgan Stanley (MS)
Thursday: Netflix, Inc. (NFLX), CSX Corporation (CSX), Union Pacific Corporation (UNP), United Airlines Holdings, Inc. (UAL)
Friday: Schlumberger Limited (SLB).
Source: Zacks, January 14, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
WEALTH WATCH: Finding Positives in the Face of Inflation
Inflation soared 7% in 2021, the biggest increase in nearly 40 years. The Consumer Price Index, which tracks the price of a broad range of goods and services, increased 7% from the year before in December. Younger consumers have never experienced this sort of spiraling inflation. The last time prices rose so quickly was in the summer of 1982, as it was cooling off from... [READ MORE] 6
This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice.
What to do if You Get Mail From the IRS
The IRS sends letters and notices for many different reasons. Some letters need a response or action item, while some are just notices to keep you informed.
Here’s what to do if you receive mail from the IRS:
- Don’t throw it away.
- Don’t panic.
- Don’t reply unless directed to do so.
- If a response is needed, respond in a timely manner.
- Review the information to make sure it’s correct.
- Respond to a disputed noticeIf you need to call the IRS, use the phone number printed in the upper right-hand corner of the notice.
- Avoid scams through email, social media, or text messages. 7
* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
A Stretch to Combat “Tech Neck”
We spend so much time staring at our phones and computers, it’s no wonder that so many of us are suffering from “tech neck,” or a muscle tightness at the back of the neck from looking down for multiple hours of the day.
Luckily, there are quite a few stretches you can do to combat tech neck. Here is one of our favorites:
This stretch is called the exaggerated nod. While sitting at your desk or standing comfortably, slowly look up to the ceiling with your mouth closed. Then, open and close your jaw to feel a stretch in the front of your neck. Repeat this for a few seconds.
After you look up, exaggerate your nod down by staring at your chest. This will help stretch out the back of your neck. Repeat these two stretches a few times to loosen up your tech neck. 8
Black Bean and Butternut Squash Quesadillas
Time: 15 minutes
- 8 taco size flour tortillas
- 2 cups cheddar and monterey jack cheese mix
- 1 cup butternut squash puree
- 15 ounces black beans, rinsed and drained
- 1 cup salsa, or to taste
- Spray a large griddle or skillet with cooking spray and heat over medium heat.
- Working in batches as necessary, place one tortilla on the griddle and spread with ¼ cup squash. Sprinkle with ¼ cup cheese. Add a quarter of the black beans and drizzle with about 3 tablespoons of salsa. Top with another ¼ cup cheese and finish with a tortilla.
- Heat 5 minutes per side or until browned and crispy as desired. Transfer to a plate and use a pizza cutter to slice into wedges. Serve hot with sour cream, avocado, and lime.9
Footnotes and Sources
1. The Wall Street Journal, January 14, 2022
2. The Wall Street Journal, January 14, 2022
3. The Wall Street Journal, January 14, 2022
4. The Wall Street Journal, January 12, 2022
5. CNBC, January 13, 2022
6. howardcm.com, January 14, 2021
7. IRS, August 16, 2021
8. Healthline.com, September 30, 2021
9. theliveinkitchen.com, November 11, 2011
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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