Market Review: December 29, 2021

Closing Recap

Wednesday, December 29, 2021





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     It was another quiet (but strong) day for U.S. stocks heading into the New Year, with the Dow Jones Industrial Average touching a new intraday record high, the S&P moving back near the 4,800 level (posting its 70th record close of the year), while the Nasdaq Composite underperforms slightly, all on light volume. U.S. stocks look to finish 2021 at all-time highs with another push higher today along with a 6th straight winning session for crude oil prices, and as Treasury yields hit 3-week highs. No caution into the last 2-trading days of the year, with the CBOE Volatility index (VIX), or so called “fear index” ending the day near lows (4-week lows). U.S. markets are on track for solid gains this year with a +27% rise for the S&P 500, +31% for Dow Transports, +22% YTD for the Nasdaq, around +19% for the Dow, 42% for the semiconductor index and 13.75% for the Russell 2000. Mega-cap companies continue to keep the major averages higher, with names like Amazon, Alphabet, Apple, Meta, Microsoft, Nvidia and Tesla making up over 25% of the S&P 500, are also the largest members of the Nasdaq, with big gains this year.

·     Stock & Sector movers: NAND related semi makers MU, WDC, STX outperform after Samsung said will temporarily adjust operations at the NAND facility according to reports overnight; EV stocks TSLA, NKLA, RIVN weaker across the board; TSLA CEO Musk disclosed another tax sale; VSCO shares jump after reaffirming guidance and announcing a stock buyback; FCEL slides to 52-week lows after a miss on top/bottom line, weighed on shares of BLDP; BIIB shares surged as much as 13% late day after a report of a potential $42B buyout from Samsung Group – BIIB later said they do not comment on market speculation.


Economic Data:

·     U.S. Advance Goods Trade Balance for November was -$97.78B, greater than the prior month -$83.2B and estimates around -$88.1B; Nov wholesale inventories +1.2%; Nov retail inventories excluding autos +1.3%. November exports were $154.7B, or $3.3B less than October exports, while Nov imports were $252.4B, or $11.3B more than October imports

·     Pending Home sales index for November falls -2.2% vs. est. +0.5% and was down -2.7% YoY



·     Oil prices bounced between gains and losses before WTI crude finished at $76.56 per barrel, rising $0.58 or 0.76% for its 6th straight gain, off morning lows of $75.36 and down from highs of $77.37 after bullish inventory data helped boost prices. Global supply outages and declining U.S. inventories offset worries that rising coronavirus cases might reduce demand. Both WTI crude and Brent contracts are trading near their highest in a month, aided by strength in global equities. Gold prices fell -$5.10 or 0.3% to end the day at $1,805.80 an ounce, bouncing off the worst levels of the day ($1,789.10 an ounce), helped by a weaker dollar.


Currencies & Treasuries

·     Treasury yields on the long-end of the curve outperformed, with the 10-yr riding over 6 bps to highs around 1.55%, while the 30-yr rose around 6 bps as well to 1.96%, and the shorter-term 2-yr little changed at 0.754%. The U.S. Treasury sold $56B in 7-year notes at a yield of 1.48% with a bid-to-cover at 2.21 and indirects getting 59.25%. The auction followed a $56 billion auction of two-year notes on Monday and a $57 billion sale of five-year notes on Tuesday.

·     The U.S. dollar edged lower, while the safe-haven yen touched a one-month low as investors looked beyond a surge in Omicron cases and rotated into risker and emerging market currencies. The dollar index (DXY) slid 0.28% below the 96 level as the euro climbed. Risk-sensitive currencies such as the Australian, New Zealand and Canadian dollars, were higher, while stocks were mixed.






WTI Crude















10-Year Note





Sector News Breakdown


·     Retailers; VSCO announced a $250 million accelerated share repurchase program and also reaffirmed its Q4 sales, operating income and earnings guidance; general market strength in consumer discretionary stocks with TGT, NKE, GPS among leaders in the S&P early

·     Auto sector; TSLA disclosed that its CEO Elon Musk sold $1.02B in common stock on December 28th after exercising shares (Musk has now sold roughly 15.7M shares of stock since saying on Nov. 6 he would sell 10% of his stake if Twitter users agreed – now with a total of $16.4B in proceeds; DIDI falls following a Reuters report that the company will use the "listing by introduction" method to list in Hong Kong, which would issue no new shares and raise no capital; RIVN slips after the CEO yesterday said it will delay deliveries of its electric pickup truck and sports utility vehicle with big battery packs to 2023

·     Consumer Staples; CALM slides on earnings miss as Q2 EPS $0.02 below est. $0.30 on revenue $390.9M vs est. $387.8M as its 12.5% YoY sales increase was driven by improved shell egg pricing, though their operating results reflect the current inflationary environment with higher costs for feed, labor, packaging, and delivery; DAR entered into a definitive agreement to acquire all the shares of Valley Proteins for ~$1.1B in cash.



·     Inventory data was bullish: the American Petroleum Institute (API) said weekly crude inventories fell -3.09M barrels last week; gasoline inventories fell -319K barrels, and distillates fell -700K barrels. This morning, the EIA said weekly crude stockpiles fell -3.57M barrels vs. est. -2.7M, while gasoline stockpiles fell -1.459M and distillates declined -1.726MM; the U.S. crude stocks in the Strategic petroleum Reserve (SPR) fell to lowest since Nov 2002 last week

·     Utilities & Solar; FCEL shares slide after Q4 revs of $13.9M missed the $21.9M estimate (down -19% YoY) and posted an unexpected EPS loss of (-$0.07) saying the rev decline was driven by a $5.6M decrease in service agreements and license revenues/Q4 adjusted EBITDA loss was $11.86M compared with a $8.55M loss in the prior-year period



·     Bank movers; Treasury yields pushed higher throughout the trading day, helping provide support for some banks and insurance names initially before reversing; MFIN shares tumbled after the SEC charged the company with illegally engaging in two schemes to reverse the company’s plummeting stock price. Bitcoin, FinTech, & Payments; crypto asset prices were up and down most of the day, in what has been a volatile month for the likes of Bitcoin, Ether and other smaller players; in REITs; DOUG will be added to the S&P SmallCap 600 prior to the open of trading on Thursday, December 30, replacing MTRX, which will be removed from the S&P SmallCap 600 effective prior to the open of trading on Friday, December 31



·     Pharma & Biotech movers; BIIB shares surged late day after a report in the Korea Economic Daily reported that the Samsung Group in South Korea was in talks to buy the U.S.-based biotech. ; CEMI shares fell after saying the FDA declined to review the company’s application for an emergency use authorization for its DPP Respiratory Antigen Panel; AMPH announced that the FDA had tentatively approved an abbreviated new drug application for its Vasopressin injection; NRXP filed breakthrough therapy designation request for Zyesami® (aviptadil) in patients at immediate risk of death from COVID-19 despite treatment with remdesivir and other approved therapies


Technology, Media & Telecom

·     Internet; BABA is discussing selling its 30% stake in WB to a state-owned media company in an effort to reduce its influence over China’s tech landscape, Bloomberg reported; FB shares slipped after the WSJ reported that the social media company looked to divide lawmakers along party lines to forestall any bipartisan attempt to install tougher rules on social media companies

·     Semiconductors; another strong day of gains for semi’s as the Philly index (SOX) moves back above 4,000 and near all-time highs; NAND related semi makers outperform after Samsung said will "temporarily adjust operations" at the NAND facility. Wells Fargo said” "while scale / duration of any production loss is unknown, given disciplined NAND Flash vendor-held inventory levels, we would view NAND production impacts as a positive for WDC and MU)

·     Hardware & Software movers; AAPL suspended operations at a Foxconn assembly plant in India following a dispute over working conditions and employee safety; CALX will replace CIT in the S&P MidCap 400 effective prior to the opening of trading on Tuesday, January 4. First Citizens BancShares Inc. (FCNCA) is acquiring CIT Group; video gamer makers down sharply in 2021 with ATVI down over 28%, TTWO down -14% and EA down about 7%; in media, a big year of losses for the likes of VIAC down over 19%, DISCA down -19% and DIS -16% lower

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.