Coffee With Greta: Year-End For Traders
DJIA Futures: -149 (-0.5%)
SPX Futures: -26 (-0.7%)
NASDAQ Futures: -117 (-1.1%)
Good morning friends!
Futures are lower as traders gear up for the final trading day of 2022.
Let’s get right to it!
The End of 2022
Today is the final trading day of 2022 with no Santa Rally lifting the market as the year comes to a close.
This will be the worst year for stocks since 2008 and the major indexes are all on track to snap a two-month win streak in December.
Year-to-date, the Dow Jones is down 8.6%, while the S&P 500 has lost 19.2%, and the Nasdaq has tumbled 33%.
But the 4th quarter as a whole has actually been positive for Wall Street.
The Dow is on track for a 15.7% quarterly gain, its best since Q2 2020.
The S&P is also up 7.4% this quarter.
But the Nasdaq has slipped 0.9%, on track for its fourth straight negative quarter for the first time since 2001.
Most analysts expect the bear market to extend into the new year as the Fed continues to tighten and a recession is expected in the first half of the year.
Oil Prices Slip, On Track For Annual Gain
Oil prices are falling this morning but on track to close higher in 2022 for the second straight year.
West Texas Intermediate crude futures are down 0.3% to $78 bbl while Brent crude futures are down 0.2% to $83 bbl.
Although both contracts have fallen sharply from this year’s earlier peak they’re still on track for annual gains.
Brent looks set to gain more than 7% in 2022 after a 50% jump in 2021.
WTI is on track to rise 4.1% this year vs 55% last year.
Bond Markets Close Early Today
U.S. Treasury yields are mixed on the final trading day of the year as uncertainty remains about Fed policy and an impending recession.
The 2-year yield is up 5 basis points to 4.41% while the 10-year yield is down 1 basis point to 3.87%.
CME Group’s FedWatch Tool shows 69.7% of traders expecting the Fed to continue slowing rate hikes with a 25 basis point move at their first meeting in 2023.
The bond markets close early at 2:00 p.m. ET today and will be closed Monday alongside the equities market in observance of New Year’s Day.
Southwest Expects Normal Operations Today
Southwest Airlines (LUV) shares are slipping 0.8% ahead of the open after rallying on Thursday after saying it expected to return to normal operations today.
The airline has only canceled 39 flights scheduled for today, down from more than 2,300 on Thursday.
In a staff memo Thursday, the CEO said, “We have all hands on deck and tested solutions in place to support the restored operation. I’m confident, but I’m also cautious.”
Executives also warned on a call with reporters that the holiday meltdown “will certainly be an impact to the fourth quarter”.
Southwest has promised to reimburse customers for expenses they incurred due to the cancellations including hotels, food, or other travel accommodations.