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Three key trends dominated the market last week:
Jobs: Friday’s monthly employment numbers report signalled good news on the economic front. In January, 467,000 jobs were added, above expectations. Given the difficulties provided by omicron, this was particularly positive, implying that the labour market’s roots are strong enough to withstand the disruption caused by the latest variant and wave of workplace absenteeism.
Rate hikes: The Federal Reserve has been, and will continue to be, the driving force influencing market mood and performance. Markets are recalibrating to an earlier and probably more aggressive monetary policy lift-off.
Pullback: After plunging into correction territory (-10%) in late January, stocks regained their footing this week, gaining four out of five days to post a slight gain. Underneath the hood of the decline, the falls have been most severe in last year’s big names, as well as in parts of the market with the highest valuations, such as the technology sector, with the tech-heavy NASDAQ down by about twice as much as the Dow and S&P 500 in 20221.
One Signal Xpert and Xpress both outperformed its benchmark index, returning 2.85% and 3.95% respectively, compared to 1.55% for the S&P 500.