Markets rise ahead of the last day of trading for 2022 tomorrow

Dow finished up 345, advancers over decliners 5-1 & NAZ jumped 264.  The MLP index gained 3+ to the 216s & the REIT index advanced 7 to the 373s.  Junk bond funds rose along with the stock market & Treasuries saw more buying which reduced yields.  Oil continued lower in the 78s & gold added 7 to 1823 (more on both below).

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Goldman Sachs (GS), a Dow stock, plans to cut as many as 4K jobs in the new year.  The confirmation of job cuts after CEO David Solomon warned in his end-of-the-year message to employees that the world's 2nd-largest investment bank will be trimming its workforce in the first few weeks of the year and the layoffs could be in the thousands.  "We are conducting a careful review and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January," Solomon said.  "There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity," Solomon explained. "For our leadership team, the focus is on preparing the firm to weather these headwinds."  GS already laid off 500 employees in Sep as the financial sector continued to take a battering due the economic downturn & a report a few weeks ago said that Solomon was considering slashing bonuses by at least 40% for roughly 3K investment bankers.  Solomon hinted earlier this month that further cuts could be on the horizon as he offered a gloomy outlook for the health of the economy in 2023.  "You have to assume that we have some bumpy times ahead," Solomon said during an interview.  "You have to be a little more cautious with your financial resources, with your sizing and footprint of the organization."  He added, "That might also come from pruning in certain areas."  The stock rose 2.37.
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Major bank plans to cut as many as 4k jobs in in January

The average long-term US mortgage rate rose after 6 weeks of decline.  The 30-year fixed-rate mortgage averaged 6.42%, down from 6.27% last week, according to mortgage buyer Freddie Mac.  A year ago, the 30-year FRM averaged 3.11%.  The 15-year fixed-rate mortgage averaged 5.68% down from last week when it averaged 5.69%.  A year ago, the 15-year FRM averaged 2.33%.  Rates are coming off their Nov peak for potential homebuyers, but new data indicates homeowners remain hesitant to list their homes.  The long-term rate reached 7.08% in late Oct & again in early Nov as the Federal Reserve has continued to crank up its key lending rate this year in an effort to cool the economy & tame inflation.  The big increase in mortgage rates has torpedoed the housing market, with sales of existing homes falling for 10 straight months to the lowest level in more than a decade.  While home prices are now dropping as demand has declined, they are still nearly 11% higher than a year ago.  Higher prices and a doubling of mortgage rates have made homebuying much less affordable & a much more daunting prospect for many people.  George Ratiu, senior economist at realtor.com, calculates that the monthly payment for a median-priced home is now about $2100, before taxes & insurance, up more than 60% from a year ago.  The median is halfway between the highest & lowest figures.  Sales of new homes are also falling.  Ratiu expects mortgage rates will remain above 6% next year & sales to stay low.  "All of these data are indicative of a market going through a major reset, which is the Fed’s goal," he added.  The Fed has hiked its benchmark interest rate 7 times this year to 4.25-4.5%, the highest in about 15 years.  It has signaled it may raise them another 3-qtrs of a point next year.

Average long-term US mortgage rate rose after six weeks of decline

The UK & France said they currently had no plans to reintroduce mandatory Covid-19 tests or additional requirements for travelers arriving into the country.  UK Defense Minister Ben Wallace said he expected to “see some clarification” either by tomorrow from the country's Dept for Transport as to any new rules for arrivals.  It comes as several nations announced new measures in response to China's relaxation of Covid restrictions amid a suspected surge of infections but reduced domestic testing. Beijing on Monday dropped its quarantine on arrival policy, leading many to book their first overseas trips in years.  Italy, the center of Europe's initial outbreak in early 2020, yesterday became the first country in the region to announce that mandatory antigen swabs would be required of all travelers coming from China.  On one De. 26 flight from China into Milan’s Malpensa Airport, 52% of passengers tested positive for Covid, la Repubblica reported.  EU health officials were locked in talks to try to coordinate a response.  “From a scientific point of view, there is no reason at this stage to bring back controls at the borders,” Brigitte Autran, head of the French health risk assessment committee COVARS, said on France's Radio Classique.  German, Portuguese & Austrian officials also appeared reluctant to introduce new measures.  But Italian Prime Minister Giorgia Meloni said that her country's testing measures may be ineffective if they are not implemented across the EU since many travelers enter Italy through other Schengen countries.  She said preliminary tests showed that Covid-positive travelers from China had known omicron variants.  Italy's National Institute of Infectious Diseases reportedly called for an increase in testing for those arriving from China.  “It would be better if the coordination of surveillance should take place at European level,” the institute said.  The US said from Jan 5. all arrivals from mainland China, Hong Kong & Macau must supply a negative Covid test taken within 2 days of departure.

UK and France no plans to follow Italy with Covid tests for China arrivals 

Gold prices settled higher supported by a sell-off in the $ index, after retreating modestly in the morning trade.  Gold prices due in Feb rose $10 (0.6%) to settle at $1826 per ounce.  Gold prices finished higher today, on track to finish just shy of 6-month highs after what has been a volatile year.  Precious metals traders have bid up prices since the beginning of Nov as the strength of the $ has eased.  The ICE US Dollar Index, a gauge of the $'s strength against a basket of major currencies, dropped 0.6% at 103.85.  Some of this momentum can be attributed to traders clinging to hopes for a Federal Reserve policy pivot some time next year, even as the central bank has signaled with its latest "dot plot" forecast that it doesn't expect to cut its policy interest rate until 2024.

Gold ends higher, boosted by weaker greenback and on track to finish 2022 near 6-month high

WTI crude oil futures end down 0.7% to $78.40 a barrel reflecting trader sentiments ahead of the New Year.  Today's weakness across the energy complex despite a weak $ & strong equities suggests a significant amount of year-end positioning since no fresh bearish headlines appeared attributable to today's price decline.

Oil Closes Lower on Positioning Ahead of Year End

Buyers came out at the opening & were able to keep the Dow at elevated levels for the rest of the trading session.  However, the Dow is still where it was 2 months ago.

Dow Jones Industrials