Markets rally after 3 days of selling

Dow surged 560 & finished near the highs, advancers over decliners over 4-1 & NAZ jumped 360.  The MLP index.went up 2+ to 170 & the REIT index climbed 4+ to 491.  Junk bond funds remain in demand, benefiting from the stock rally, & Treasuries were heavily sold, raising yields.  Oil shot up 2+ to the 71s & gold retreated 6 to 1788 (more on both below).

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A lack of foreign tourists opening up their wallets & another wave of coronavirus cases in some major US cities weighed on shopper turnout on the final Sat before Christmas, preventing it from bouncing back to pre-pandemic levels.  Visits to retail stores dropped 26.3% on Sat compared with the Sat before Christmas in 2019, according to preliminary data from Sensormatic Solutions.  Year over year, though, retail traffic jumped 19.4%.  The day known as Super Saturday is viewed as the second-busiest shopping day of the holiday season, behind Black Friday.  In some cities over the weekend, lines were long at Covid-19 testing sites — not at retail counters.  But consumers did leave their homes to shop for last-minute gifts, holiday decorations & ingredients to cook up homemade meals.  Many braved the pandemic to head to the movies, too, as “Spider-Man: No Way Home” enjoyed a blowout-weekend haul.  “Americans have shown that they will not let this get in their way of sort of getting back to normal as fast as they can,” said Peter McCall, senior manager of retail consulting at Sensormatic.  “Super Saturday is a good example of that.”  There were some signs that shoppers are being more cautious in how they shop.  McCall said that since Black Friday weekend, open-air shopping centers & outlet malls have been increasingly preferred over enclosed venues among US consumers.  “I can’t necessarily tell you that it’s omicron-related, but we are seeing a preference that looked similar to what it looked like a year ago,” McCall added.

Shopping in stores on final Saturday before Christmas down 26% from pre-Covid

Nike (NKE), a Dow stock, reported better-than-expected fiscal Q2, despite ongoing supply chain pressures that have slowed deliveries & threatened to upend the holiday shopping season.  CEO John Donahoe said the sneaker maker is in a “much stronger competitive position” than it was pre-pandemic.  While Covid-related factory closures overseas slowed inventory shipments earlier this year, denting its progress, the flow of goods picked up during its latest qtr, particularly in North America.  CFO Matt Friend said that all factories in Vietnam are up & running, & production is back to about 80% of pre-closure levels.  NKE is increasingly confident that supply levels globally will normalize heading into fiscal 2023, said Friend.  EPS rose to 83¢ from 78¢ a year earlier, topping expectations for 63¢.  Revenue rose 1% to $11.4B from $11.2B, outpacing estimates of $11.2B.  Sales in North America, its biggest market, climbed 12%, representing the highest growth of all geographies.  Sales in Greater China fell 20%, while revenue in its Europe, Middle East & Africa region grew 6%.  The recovery in China has become a bigger focus for investors of late as the market remains key to the company's future growth.  Western brands have faced some backlash in China amid global tensions.  Analysts have been looking for NKE to report EPS of $3.59 on sales of $47.1B.  That would represent revenue growth of 5.7% year over year. That would represent revenue growth of 5.7% year over year.  For fiscal Q3, NKE expects sales to grow a low-single-digit rate from the prior year, due to lingering effects from the Vietnam factory closures.  The forecast is for a 2.5% lift.  The stock jumped 9.87 (6%).
If you would like to learn more about NKE, click on this link:
club.ino.com/trend/analysis/stock/NKEa_aid=CD3289&a_bid=6ae5b6f

Nike shares rise as earnings, sales top estimates, fueled by North American growth

Already declining US population growth dipped to its lowest rate since the nation's founding during the first year of the Covid-19 pandemic.  That's because the coronavirus curtailed immigration, delayed pregnancies & killed hundreds of thousands of US residents.  Figures from the Census Bureau show the US grew by only 0.1% with only an additional 393K added to the US population, from Jul 2020 to Jul 2021.  Population estimates are derived from calculating the number of births, deaths & migration in the US.  For the first time, intl migration surpassed natural increases from births outnumbering deaths.  There was a net increase of almost 245K residents from intl migration but only around 148K from natural increase.

U.S. population growth at the lowest rate ever in the Covid pandemic’s first year

Gold futures finished lower, reversing an earlier gain, to book a 2nd straight decline, as stocks that took a beating yesterday were staging a rebound, highlighting some return in risk appetite by investors after an omicron-sparked selloff.  Treasury yields also popped higher, creating a further headwind for bullion buying in the near-term.  Treasury yields were rising, with the 10-year Treasury note rate at around 1.48% from 1.418% yesterday.  Richer yields can undercut demand for precious metals that don't offer a coupon.  Feb gold traded $5 lower to settle at $1788 an ounce, following a 0.6% decline for the precious metal in the session before.  Meanwhile, the $ was flat but holding in positive territory, as measured by the ICE US Dollar Index.  Many global markets, including those for precious metals, will be closed on Fri for the Christmas holiday.  Light holiday trading was expected to create some anomalies in commodities dealings over the holiday-shortened stretch.  Earlier in the session, bullish bullion investors appeared to be taking the opportunity to hedge further volatility in markets, with the yellow metal reaching an intraday peak at $1801 an ounce until those gains evaporated.  Yesterday, gold sold off despite a broad-based selloff in equities, with the downturn attributed to growing concerns about the potential for the spread of the omicron variant of the COVID to harm the global economic rebound.  It is an environment that should have delivered a boost to gold but light liquidity might have forced some traders to sell gold investments.  Although negative headlines about the transmissibility of omicron persist, investors are taking on more risk & lightening assets considered havens, including bonds.

Gold books back-to-back loss as equity markets and yields stage rebound

Oil futures ended strongly higher, taking back a chunk of a 2-day plunge stoked by worries over the spread of the omicron variant & its potential toll on demand.  West Texas Intermediate (WTI) crude for Feb rose $2.51 (3.7%) to close at $71.12 a barrel.  Feb Brent crude, the global benchmark, ended $2.46 higher, up 3.4%, at $73.98a barrel.  WTI dropped a combined 5.7% in Fri & Mon trading, while Brent fell 4.7%.  Crude tumbled yesterday, but finished off session lows, as European countries imposed lockdowns & considered other restrictions on consumer activity as the omicron variant of the coronavirus that causes COVID-19 spreads rapidly around the world, including in the US.  OPEC+ has been raising output targets in monthly increments of 400K barrels a day as it unwinds production cuts imposed last year, drawing the ire of the Biden administration & other consuming countries that have pushed the group to pump more.  That led the US & other countries last month to release crude from their strategic reserves.  Meanwhile, OPEC+ compliance with production cuts rose to 117% last month from 116% in Oct, meaning that members continue to pump well below the group's target.   Weakness yesterday was also attributed to Dem Sen Joe Manchin's opposition to Pres Biden's nearly $2T spending bill.  With the Senate split 50-50, his opposition would sink the legislation, but hopes remained among Dems that elements of the bill could still win passage & provide some more fiscal stimulus for the US economy.   Biden today announced an omicron-fighting plan, including the purchase of 500M at-home COVID-19 testing kits.  He also said the US will not return to the strict lockdowns that occurred in Mar 2020, but will instead focus on boosters & shots for the unvaccinated.

U.S. oil benchmark ends 3.7% higher as crude attempts to bounce back from omicron selloff

While buyers came back today, the Dow has been having a rough go in the last 2 months (shown below).  The virus shows no signs of going away soon along with the inflation problems are just a few of the problems that will limit a further advance.  Also, results this week are not impressive with light trading in this semi-holiday shortened week of trading..

Dow Jones Industrials