With the start to 2022 almost 1 month in, it’s become clear this year won’t be like the previous one. We continue to let our indicators and the charts guide our decision making. We’ve become much more cautious with what we’re seeing, but will be ready to deploy cash and reposition portfolios as indicators change. Risks affecting the market continue to rise, and we’ll see if the market can eventually get back to climbing that wall of worry.
In our latest Situation Report, our Chief Investment Officer Jim Reardon breaks down a 2021 year in review. He dives into major topics of the past year such as inflation, supply chain problems, the worker shortage, cryptocurrency, and ESG Investing.
The confidence of the nation’s consumers slipped this month as the spread of Omicron and higher prices for just about everything weighed on consumer sentiment. The Conference Board reported its Consumer Confidence Survey fell 1.4 points to 113.8 this month. Economists had forecast the index to pullback to 111.7. During the pandemic, the index reached a high of 128.9 last summer during a lull in the pandemic to a low of 85.7 at the onset.
Stunningly higher shipping costs are yet another element of the nation’s supply chain problems. Shipping costs have skyrocketed as shortages of trucks, truck drivers, warehouse workers and others constrict the shipping pipeline and raise costs.
The value of a dollar has plummeted lately with the recent ravages of inflation, but the loss of value is just a more severe and considerably steeper continuation of the long-term decline in the value of a dollar. As measured by the Consumer Price Index (CPI), the dollar has lost about 40% of its purchasing power just since January 1, 2000. Once called the “almighty” dollar, it seems that adjective is hardly warranted now.
Applications for first-time unemployment benefits rose slightly last week to 207,000, the Labor Department reported. The reading remained near its more than 50-year low, suggesting that the soaring number of Omicron cases isn’t having much effect on layoffs. Economists had expected initial jobless claims to total 195,000.