Weekly Market Update

Author : Rachel Poole
Date : January 10, 2022

Global Market News

Global equities tumble in first trading week of 2022
Global equities were down in this year’s first week of trading. The S&P 500 and Dow Jones closed the week down 1.87% and 0.29%, respectively, while the Nasdaq dropped 4.53%. The yield on the US 10-year Treasury note increased to 1.77%, and the price of a barrel of West Texas Intermediate crude oil surged more than 5%, ending the week at $79.06. Volatility, as measured by the CBOE Volatility Index, ended the week at 18.7.

Fed hints at raising rates, speeding up stimulus rollbacks
In the minutes of the Federal Reserve’s December meeting, the central bank hinted it would more aggressively remove stimulus and start raising interest rates earlier than expected. Fed officials did not explicitly say when the $8.3 trillion bonds it is holding would be rolled off, the meeting minutes indicated the process could start in the next several months. The central bank foresees up to three quarter-percentage-point rate increases in 2022 and markets currently expect the first rise in interest rates to come in March.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 300,000,000 Global Covid-19 deaths: 5,470,000
US Confirmed Covid-19 cases: 58,900,000 US Covid-19 deaths: 833,000. *As of Friday evening

US daily Covid cases exceeds 1 million
The US has reported record-breaking numbers of Covid-19 cases over the last week, exceeding 1 million new cases daily, according to data from Johns Hopkins University. The Omnicron variant now makes up 95% of cases in the US while the Delta variant represents only 4.6% of sequenced cases. India has reported its highest number of daily Covid-19 cases since September with 37,379 new cases, and Australia has also recorded pandemic highs as Omnicron has driven up hospitalization rates in the country. In response to the jump in cases around the world, the World Health Organization has warned that the unequal distribution of vaccines is contributing to the emergence of new variants and is putting the global economic recovery at risk.

International Developments

Kazakh protests escalate
Kazakhstan’s authoritarian leader, President Kassym-Jomart Tokayev, has given government troops a shoot-to-kill order to control mass demonstrations. Dozens are believed to have been killed in the protests since they began on January 2nd. Demonstrations sparked by a surge in fuel prices have snowballed into the most serious anti-government protests the country has seen in decades. The US, United Nations, and European Union have urged restraint while China and Turkey have expressed their support of President Tokayev.

Taiwan to invest $200 million in Lithuania
Taiwan is setting up a $200 million fund to invest in Lithuania after the Baltic state has been slammed with harsh measures by China. Lithuania recently agreed to let Taiwan open a representative office in the country. In response to the decision, China has withdrawn its ambassador from Vilnius, banned Lithuanian imports, and has pressured foreign manufacturers to stop using Lithuanian components in their goods. Many political analysts view China’s crackdown on Lithuania as a test case for the effectiveness of China’s coercion tactics. It remains to be seen whether Lithuania stands firm or if it will receive the full support of other European Union member states and the US.

US Social & Political Developments

US and Japan pledge to cooperate on defense technology
During a virtual meeting between US Secretary of State Antony Blinken and Japanese officials, the two countries pledged to collaborate on defense projects including hypersonic missiles and space-based capabilities. The agreement comes on the heels of the announcement that Japan and Australia will sign a defense treaty to facilitate military exercises between the two countries.

Biden denounces political violence on anniversary of Capitol riot
On the anniversary of the January 6th attack on the Capitol, US President Joe Biden denounced political violence and condemned former President Donald Trump and his allies for conducting an “undemocratic” and “un-American” campaign against the election system to avoid admitting defeat. Biden’s speech warned that American democracy is in grave danger. Democrats marked the anniversary of the insurrection with speeches, personal testimony, moments of silence, and a candlelight vigil.

Corporate/Sector News

Apple becomes first company to hit a valuation of $3T
Ringing in the new year, Apple became the first company in history to reach a valuation of $3 trillion. The company achieved the milestone on the first day of trading in 2022 with shares climbing 3% to $182.88. It took the company only a year and a half to gain its latest trillion dollars. Investors seem to believe that Apple will continue launching its best-selling products and will be successful in exploring new markets like self-driving electric cars. The only other company close to Apple’s market cap is Microsoft which has a valuation of $2.5 trillion.

Germany shuts three of six remaining nuclear power plants in shift to renewables
Germany has closed the doors of three of its last six nuclear power stations as it shifts towards renewables. The remaining three nuclear power plants will be shut down by the end of 2022. Germany made its first steps to phase out nuclear power in the wake of the 2011 Fukushima disaster in Japan and set 2022 as the deadline to shut all of the plants down. The country aims to make renewables 80% of power demand by 2030 by expanding wind and solar power infrastructure.

A wave of consolidation hits media markets
There is a lot of consolidation going on in the media world. In the latest deal, The New York Times (NYT) will acquire sports subscription site The Athletic for $550 million in an all-cash transaction expected to close in the first quarter. The purchase will move NYT closer to its goal of 10 million paid subscribers by 2025 as The Athletic’s 1.2 million subscribers will be added to the paper’s existing 8.3 million subscribers. This deal comes amid a wave of media consolidation which has included Vox’s merger with Group Nine, Buzzfeed’s purchase of Complex, Dotdash’s acquisition of Meredith’s National Media Group, and Axel Springer’s procurement of Politico.

Image of the Week

Video of the Week

It will slash journey times from the airport to the Eternal City by half an hour.
Source: World Economic Forum