THE WEEK ON WALL STREET

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.⁵oueryone Happy Holidays!