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Stocks down on last trading day of the year – Global stocks experiencing rare back-to-back yearly declines – US dollar on track for 7-year record – Jobless claims rise – Oil poised to end year higher
On the final trading day of 2022, US stock index futures moved downward. Indexes were poised for their first annual drop after three straight years of gains, dragged down by the Federal Reserve’s fastest interest rate hikes since the 1980s as it battles to float decades-high inflation, Yahoo Finance reported.
S&P 500 contracts slipped about 0.7%, while Nasdaq 100 contracts retreated more than 1%, Bloomberg reported. In early trading, the S&P 500, Dow, and Nasdaq were each pointing to losses of around 0.3% near 6:20 a.m. ET, Yahoo reported.
The benchmark 10-year US Treasury Note was up +0.04 with a yield of 3.875% as of 9:02 AM EST.
The average rate on the 30-year fixed mortgage rose to 6.42% from 6.27% the week prior, according to Freddie Mac.
The S&P 500 index has declined for two consecutive years, something that has only occurred on four occasions since 1928. The benchmark S&P 500 and tech-heavy Nasdaq have slumped 19% and 33%, respectively, this year.
Bonds lost 16% of value, the biggest decline since at least 1990 for one leading measure, Bloomberg reported.
Now, global stocks are reeling from a record $18 trillion wipeout and dropped more than 20 percent in 2022, as the MSCI All-Country World Index is on track for its worst performance since the 2008 crisis, Gulf News reported.
The continual interest rate hikes by the Federal Reserve more than doubled the US 10-year Treasury Note yields, which is the rate underpinning global capital costs.
The dollar was slightly weaker early Friday, down around 0.1% at 103.900. However, the dollar was on track for its biggest annual gain since 2015, gaining around 8.6% so far in 2022, Yahoo reported. Benefiting from rising US interest rates, the dollar on Friday was on track for its best annual performance in seven years.
The Federal Reserve and other central banks around the world have been raising interest rates to battle inflation amid a host of challenges, including supply chain issues, Russia’s invasion of Ukraine and its impact on oil, as well as an energy crisis fueled by the pandemic, Yahoo Finance reported. Speculation about interest rate hikes – how fast and how far – continues to influence the market.
For the week ending December 24, first-time jobless claims for weekly unemployment benefits increased to 225,000, according to Labor Department data released Thursday. It’s an increase of 9000 from the previous week’s total of 216,000, CNN reported. Continuing claims – filed by those receiving unemployment benefits for more than one week – increased to 1.71 million for the week ending December 17 from 1.67 million, a number that is now at its highest level since February.
On Friday, oil prices traded higher and were on track to post their second straight annual gains after a turbulent year marked by tight supplies due to the Ukraine war, weakening demand from China, and a strong dollar, FOXBusiness reported.
The benchmark U.S. West Intermediate crude traded around $78.00 a barrel early on Friday and was on track to climb 4.5% on the whole for 2022, after a 55% gain in 2021.
In March, US oil reached a 14-year high of $130 per barrel after Russia invaded Ukraine.
