Stocks last week showed mixed action as banks and energy sectors did well while tech suffered due to rising interest rates that are affecting forward valuation price targets. Higher interest rates negatively affect tech stock values even while they indicate improving economic growth. The 10 year Treasury hit 1.77% last week and gurus at Goldman Sachs are saying the Fed could raise interest rates 4 times this year thanks to continued inflation and an economic rebound as the omicron variant starts to wobble. Last week the Dow lost about 106 points to settle at 36,231 when it was all said and done. Volume was higher and selling continued today as the Dow closed off 163 Points at 36,067. The Dow had been off over 500 points early today but dip buyers came in and sparked a modest rebound.
The Economy and Earnings
The Department of Labor released its latest job report which details job openings, hiring, layoffs and those who quit their positions. The report showed that employers posted 10.6 million job openings in November against 6.9 million people across the nation that are unemployed. The reading above 10 million is the sixth month in a row at this level and this means there are 1.5 jobs available for each unemployed worker. Most of the workers who quit work are those in hospitality and service work where a labor shortage has given workers the edge in being able to find better paying work. One item of interest in the report was about flight attendants who are leaving because they have unexpectedly been turned into cops or conflict resolution negotiators.
Shares of Ford bolted higher when it announce it was doubling production for its electric truck by mid-2023 as preorders continue to ramp up. The company began taking firm purchase orders for the F 150 lightning on January 6th and deliveries are expected to begin in the spring time when the birdies sing. Ford also announced that car sales for all of 2021 were down 6.8% even though 4th quarter sales jumped 26.8% over 3rd quarter numbers. This showed that Ford’s sales accelerated into the end of the year and might set them up well for 2022.
Items of Interest
The lunkheads are scheduling a snow hike in the Snoqualmie pass area for late January. I might tag along but it is weather dependent since the record snow dump might turn us into snow miners instead of snow shoe-“ers”. (is that even a word?)