Fed Decision Sparks Volatile Week for Major Indexes

The U.S. central bank is taking a hawkish approach to tackle inflation

Deputy Editor
Dec 17, 2021 at 2:58 PM
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Getting into the middle of December, there was a lot that investors had to look forward to. Covid-19 omicron variant updates continued to roll in, with U.K. Prime Minister Boris Johnson confirming the first strain-related death in the country, while a Federal Reserve meeting stateside also gripped traders. The result was a dismal Monday for the major benchmarks, and that pessimism carried over into the next session, as markets logged more losses after the November producer price index (PPI) grew at its fastest pace on record.

The Dow, Nasdaq, and S&P 500 Index all logged notable wins on Wednesday, after the conclusion of the central bank's policy meeting revealed a more hawkish approach to tackle inflation. That rally was short-lived, however, as a tech selloff on Thursday had the Nasdaq logging its worst session since September. The Nasdaq is looking to reverse some of these losses during today's session, though all three major indexes are eyeing weekly drops. 

Stocks Seeing End-of-the-Year Analyst Coverage

Analysts are keeping busy as 2021 winds down, with a plethora of bull and bear notes rolling in over the week. This Petco (WOOF) earned some fresh analyst coverage, being touted as a standout amongst the competition. And while AT&T (T) is trading at its lowest level in over a decade, Morgan Stanley is still seeing some promise. Plus, several shipping companies earned praise from the brokerage bunch durng the holiday rush. On the other hand, Barclays downgraded Domino's Pizza (DPZ) amid fading pandemic-related tailwinds, while J.P. Morgan Securities hit Adobe (ADBE) with a bear note ahead of the software name's earning report.

Index Reblancing, Corporate Happenings Headline Wild Week

It was another bustling week in corporate meeting rooms, with no shortage of mega deals making headlines. Two of the more exciting stories from the week are Alcoa's (AA) addition to the S&P MidCap 400 Index, and the rebalancing of the Nasdaq 100 (NDX). Cerner (CERN) stock nabbed a record high after it was announced that Oracle (ORCL) is in talks to purchase the company. Olive Garden's parent company, Darden Restaurants (DRI), meanwhile, fell after it was announced its CEO is retiring at the end of May. Briacell Therapeutics (BTCX), on the other hand, got a boost after an inside trader agreed to acquire 10% of the company's public market securities.

Holiday-Shortened Week Packed with Data, Earnings

The holiday-shortened week is packed with economic data, including a highly anticipated Gross Domestic Product (GDP) update. As far as earnings go, some company's quarterly reports are still trickling in. Next week, expect to see results from CarMax (KMX), BlackBerry (BB), General Mills (GIS), and Nike (NKE), among others. In the meantime, investors should keep an eye on the Nasdaq-100's annual rebalancing which Schaeffer's Senior Quantitaive Analyst Rocky White broke down this week, for clues on which stocks could be good investments in the long term.


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