Weekly Market Insights: Erratic Holiday Trading Leaves Stocks in Doldrums

Kevin Leahy

January 02, 2023

In a holiday-shortened week, erratic trading left stocks marginally down for the week.

The Dow Jones Industrial Average lost 0.17%, while the Standard & Poor’s 500 slipped 0.14%. The Nasdaq Composite index fell 0.30%. The MSCI EAFE index, which tracks developed overseas stock markets, edged 0.61% higher.^1,2,3

Stocks End Lower

Steps by China to move past its zero-Covid policies triggered concerns that its economic reopening might aggravate inflation pressures, sending stocks lower and bond yields higher to begin the week. Technology stocks saw the most significant hit.

With dimming prospects of a Santa Claus rally (the historical tendency of stocks to rise in the final trading days of the year and the first two days of the new year), stocks rebounded strongly on Thursday to erase the losses of the previous two days. However, stocks again turned lower to end the week with small losses.

Lower Risk Appetite Amid Uncertainty

In an otherwise slow week for news, two monthly reports were released highlighting the market's headwinds. The first was State Street’s Investor Confidence Index, which measures the risk appetite of institutional investors. The December report showed the confidence of large asset managers in investing in risk assets, like stocks, has dropped over the past two months, explaining, in part, why stocks may have struggled of late.⁴

Meanwhile, the Atlanta Fed released its Survey of Business Uncertainty, which reflected both declining expectations around sales growth and employment, along with growing uncertainty about revenue and employment growth over the next 12 months.⁵

This Week: Key Economic Data

Tuesday: Purchasing Managers’ Index (PMI)-Manufacturing. Institute of Supply Management (ISM) Manufacturing. Job Openings and Labor Turnover Survey (JOLTS).

Thursday: Jobless Claims. Automated Data Processing (ADP) Employment Report. Purchasing Managers’ Index (PMI)-Services.

Friday: Employment Situation.

^{Source: Econoday, December 30, 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

Thursday: Constellation Brands, Inc. (STZ), Walgreens Boots Alliance, Inc. (WBA), Conagra Brands (CAG).

^{Source: Zacks, December 30, 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.}

"Science is the great antidote to the poison of enthusiasm and superstition."

– Adam Smith

What is the Premium Tax Credit?

The premium tax credit (PTC) is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace. There are a few requirements to qualify for the PTC, including:

Having a household income within a certain range (If you or your spouse received unemployment compensation for any week beginning during 2021, your household income is considered to fall within this range.)
Not filing a tax return using the filing status Married Filing Separately
Not being claimed as a dependent by another person
Have health insurance through the Health Insurance Marketplace
Are not able to get affordable coverage through an eligible employer-sponsored plan that provides minimum value.
Are not eligible for coverage through a government program

* 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.

Tip adapted from IRS.gov⁶

White Bean Chili Recipe

Break out that dutch oven because this white bean chili recipe is perfect for winter.

Ingredients

1 small yellow onion, diced
1 tbsp olive oil
2 cloves minced garlic
2 cans chicken broth
1 can diced green chilies
1 1/2 tsp cumin
1/2 tsp paprika, dried oregano, and ground coriander
1/4 tsp cayenne pepper
salt and pepper to taste
1 pkg light cream cheese
1 1/4 cups frozen or fresh corn
2 cans cannellini beans
2 1/2 cups cooked chicken (shredded)
1 tbsp fresh lime juice
2 tbsp chopped fresh cilantro, plus more for serving

Directions

Heat olive oil in a large pot over medium-high heat. Saute onion and garlic.
Add chicken broth, green chilies, and all seasonings. Bring mixture just to a boil then reduce heat to medium-low and simmer for 15 minutes.
Drain and rinse beans. Set 1 cup whole beans aside. Transfer 1 cup of beans to a food processor along with 1/4 cup of broth from soup. Puree until nearly smooth.
Add cream cheese to soup along with corn, whole beans, and pureed beans, and stir well. Simmer for 5 - 10 minutes.
Stir in chicken, fresh lime juice and cilantro.

Tip adapted from Cooking Classy⁷