Daily Market Color December 28, 2021Yield Curve Remains Flat Heading Into Year-End Q4 has seen a dramatic tightening of spreads between short & long-term rates… 2y vs 10y has contracted by more the 60bps to its narrowest gap since November 2020 5y vs 10y has tightened by more than 25bps to less than 0.20% – least since May 2020 Santa Claus rally stalls. One day after notching a record high, the S&P 500 pulled back 0.10% in another trading session of light volumes. Other major equity indices were mixed, the Dow gaining 0.26% and Nasdaq declining 0.56%, led lower by the tech sector. In commodities markets, the price of gold climbed to a one-month high of $1,812/oz as the persistent inflationary pressures provide demand for the safe-haven asset. Less heat in the housing market. A very limited data day was headlined by the S&P CoreLogic Case-Shiller National Home Price Index, which displayed home prices in the major metropolitan areas rising 19.1% YoY in October (vs. 19.7% in the prior month). While there was a slowing, it is important to note that the +19.1% still represents the 4th highest reading ever. The two cities with the highest growth in home prices were Phoenix and Tampa.