Good morning contrarians!
It’s the final trading week of the year, historically a time when very little happens and trading volumes are correspondingly low. Due to the dearth of news, data releases, and other information that moves markets, we will not be publishing daily briefings this week.
One of our tenets is to not waste subscribers’ time. If there’s nothing to report, there’s nothing to report and you won’t need to be informed about things that aren’t happening and aren’t affecting your portfolio.
Caveat: Should there be unanticipated news that does move markets before Friday, we will of course address it with a special briefing. Otherwise that will be it for this year.
State of Play
Stock futures are predictably flat. Nasdaq and S&P 500 showing some tiny green shoots, up 0.2% while Dow Industrials and Russell 2000 hog the break-even point.
Bonds are selling off a bit at the short end of the curve however. The yield on the 2–year is up to 0.71%, which is the highest it’s been in about three weeks. Ten-year yields and 30-year yields are flat.
Commodities aren’t doing much. WTI crude is down 1% to trade around $73/barrel. Natural gas is up almost 2%. Nothing else worth mentioning. Cryptos are up a bit, with bitcoin about 2% higher to trade around $50,700.
Data
No major data releases to speak of today. In fact, there aren’t any to really speak of all week. Home prices tomorrow, pending home sales on Wednesday, and initial jobless claims on Thursday may be the only ones that attract any notice.
The Bottom Line
The only thing that’s weird is the movement in 2-year bonds. This usually portends risk on and cryptos at least are indeed pointing in that direction as well.
This week will see a bunch of predictions for 2022. Most of these will have been in the works for a while and can safely be ignored. Every once in awhile an astute (or lucky) prognosticator is able to pick up on a so-called ‘gray swan’ or two. My prediction is stocks will continue to rally but more about that next week.
Endgame 2021: Daily Contrarian, Dec. 27