The week 10.01. – 14.01.2022

Last week, the financial markets’ rough journey in the early days of 2022 continued, with inflation remaining the centre of attention. Inflation is a key driver and risk for the year ahead, affecting Federal Reserve (Fed) policy, consumer spending, bond yields, and sector leadership, as seen by a multi-decade increase in consumer prices. The Fed has made another hawkish swing in the first two weeks of this year, with policy now plainly shifting to combat inflation. Several Fed members are now advocating for policy rates to be raised as early as March, fearing that price pressures will become entrenched.
On Monday, the market’s negative sentiment moved from the HIGH PE sector to the rest of the market. All the main indices were heavily sold off before finding support and staging a powerful comeback rally to conclude the day well off the lows. The S& P 500 was 2.6% lower at its intraday lows than it was five trading days ago. Turnaround Tuesday finally arrived after a long wait. The indices produced another reversal when the downward probing halted. On Wednesday, it was more of the same, with fits of hesitation becoming the short-term pattern.
Indecision turned into outright selling when the S&P had trouble building on the 2-day rally. Stocks were sold across the board on Thursday and week into the session on Friday before bargain hunters showed up before the 3-day weekend.
The S&P 500 closed the week in the positive field with 0.16%. One Signal Xpert ended the week down with -0.36% and One Signal Xpress with a gain of +0.27%. The winner of the week was oil with a gain of 6.26%.