Daily Market Color December 23, 2021Risk-on Spirit Entering the Holiday Break Continued easing of the expected severity of the Omicron variant, coupled with a bevy of economic data that came in mostly in line with expectations, led to a risk-on move in financial markets in the last trading session before the Christmas holiday. Major US equity indices rose 0.75%-1.00% on the day, paced by the tech-heavy Nasdaq. In bond markets, UST yields/swap rates rose 1-5bps across the curve in a bear-steepening pattern. Economic data displays tight labor market, persistent inflation. Initial jobless claims held near a 50-year low at 205,000 (matching expectations) for the week ended December 18th, showing resiliency amongst employers despite the recent surge in Omicron cases The Core PCE deflator, the Fed’s preferred measure of inflation, remained stubbornly high at 4.7% YoY (+4.5% expected) Headline durable goods orders for November surprised to the upside (+2.5%), driven largely by civilian aircraft orders, while core durable goods orders dropped 0.1% US financial markets will be closed tomorrow in observance of the Christmas holiday. We at Derivative Path wish everyone and their families a happy and healthy holiday!
