Dow fell 59, advancers over decliners about 2-1 & NAZ retreated 96. The MLP index gained 2+ to the 178s & the REIT index advanced 1 to the 511s. Junk bond funds crawled higher & Treasuries fluctuated with the yield on the 10 year Treasury holding above 1.5%. Oil dropped 1+ to the 75s & gold jumped 14 to 1828 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
More than a thousand flights were canceled again on toay as airlines continued to contend with the omicron variant of the coronavirus. Flight-tracking service FlightAware showed 1222 cancellations &
860 delays within, into, or out of the US. Airlines have said
that omicron was causing staffing issues – even as airlines have been
hiring – & cancellations have been ongoing since Dec 24. Thousands of cancellations were also reported abroad due to the same logistical issues. Earlier this week, the Centers for Disease Control & Prevention (CDC) shortened the recommended isolation time for people with COVID-19 from 10 days to 5 days. Individuals
who are infected & asymptomatic may now isolate for just 5 days,
followed by 5 days of wearing a mask when around other people. In
addition, only people who have received a booster shot of the vaccine
are exempted from quarantine after being exposed to COVID-19. It's a move that White House medical adviser Dr Anthony Fauci said would help people "get back to the workplace." Although still trailing 2019 numbers, the tally of people flying this holiday season far exceeds last year's total.
US omicron surge causes more flight cancellations, delays
Oil prices slid today but were set to post their biggest annual gains in 12 years, spurred by the global economic recovery from the COVID-19 slump & producer restraint, even as infections surged to record highs around the world. Brent crude futures fell 3¢ to $79.50 a barrel while US West Texas Intermediate (WTI) crude futures dropped 10¢ to $76.89 a barrel. Brent will to end the year up 53%, while WTI is heading for a 57% gain, the strongest performance for the 2 benchmark contracts since 2009, when prices soared more than 70%. Both contracts touched their 2021 peak in Oct with Brent at $86.70 a barrel, the highest since 2018 & WTI at $85.41 a barrel, the loftiest since 2014. Global oil prices are expected to rise further next year as jet fuel demand catches up. After rising for several straight days, oil prices stalled today as COVID-19 cases soared to new pandemic highs across the globe, from Australia to the US, stoked by the highly transmissible Omicron coronavirus variant. US health experts warned Americans to prepare for severe disruptions in coming weeks, with infection rates likely to worsen amid increased holiday travel, New Year celebrations & school reopenings following winter breaks. With oil hovering near $80, OPEC+ will probably stick to its plan to add 400K barrels per day of supply in Feb when they meet on Jan 4, knowledgeable sources said, as they continue to wind back sharp production cuts implemented in 2020.
Oil heads for biggest annual gains since 2009
Pres Biden & Russian Pres Vladimir Putin spoke by phone as tensions rise over a significant military buildup on the Ukrainian border. White House press secretary Jen Psaki said Biden urged Putin to de-escalate tensions with Ukraine & that his administration was prepared to “respond decisively” alongside allies & partners if Russia further invades Ukraine. A senior administration official said that the tone of the conversation was “serious and substantive.” “Both leaders acknowledged that there were likely to be areas where we could make meaningful progress as well as areas where agreements may be impossible,” the official said, adding that the upcoming Jan 10 security talks will build upon Biden & Putin's discussion. Ahead of those talks, the senior administration official said that the US & European allies will continue to watch developments in Ukraine. “We’re going to continue to monitor very closely the movement and build-up of Russian forces on the Ukraine border and prepare ourselves for whatever decision ultimately is made by the Russian president,” the official said. A Putin aide told reporters that both leaders congratulated each other on the holidays & mutually wished success to the Russian & American people. The aide described the conversation between Putin & Biden as “frank, informative and specific in nature.” “Putin outlined in detail the basic principles laid down by Russia in the security proposals & emphasized that we will seek to ensure Russia's security. In principle, the US president agreed with this point of view,” the Russian source explained. “Biden clearly stated that the United States does not intend to deploy offensive strike weapons in Ukraine. And Putin noted that this is one of the key points for us,” he added. The call, the 2nd known discussion between the 2 leaders this month, was scheduled at Putin's request. The Russian pres has previously insisted that despite a massive deployment of thousands of troops along Ukraine's border, Moscow is not preparing for an invasion of its ex-Soviet neighbor. But Putin has laid out conditions for nonaggression: He has promised that Russian troops will not attack Ukraine if Kyiv's ongoing bid to join NATO is denied. Russia has described NATO's eastward expansion as a “red line” that poses security threats to Moscow.
‘A crisis of the Kremlin’s making’: Biden and Putin speak amid tensions over Ukraine
US oil futures settled lower on the eve of 2022, marking the first decline in the past 8 sessions, but the loss belies a stellar year for crude bulls, with the commodity posting the sharpest annual rise since 2009. West Texas Intermediate (WTI) crude oil for Feb declined $1.78 (2.3%) to end at $75.21 a barrel after gaining 0.6% yesterday. For the week, oil rose 1.9%, rose 13.7% in Dec & posted a 0.3% rise in the qtr. For the year, WTI rallied more than 55% to clinch its sharpest annual gain in 12 years.
U.S. oil snaps 7-session streak of gains but logs best yearly rise in over a decade
Gold futures settled sharply higher in 2021's final session,
but the precious metal still registered the steepest annual drop since
2015 as investor appetite for the traditional safe-haven asset sagged. The precious metal advanced in the final week, month & qtr of
the year but it wasn't sufficient to help avoid closing 2021 in negative
territory & registering the sharpest yearly drop, down 3.6%, since
the metal ended down over 10% in 2015. Feb gold traded up $14 (8%) to end at $1828 an
ounce, following a 0.5% gain for the metal yesterday. For the week, gold rose 0.9%, posted a 2.9% gain & rose 4%
in the final 3 months of the year.
The chart below describes the year for stocks. Starting the year at high levels, Dow had an impressive 19% rally.. However, much of that came in H1. Since then the going has been tough, held back by setbacks such as fears over Covid & inflation. After starting from a depressed level, West Texas Intermediate (US oil) was up 56% . Gold started from an elevated level & slipped back 3½% in 2021.
Dow Jones Industrials
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