2023 | January 17

The Market

Stocks Gain

The major U.S. stock indexes improved on the previous week’s positive result, with the NASDAQ adding around 4.8%, the S&P 500 2.7%, and the Dow 2.0%. The latest results mark a reversal from year-end 2022, when the S&P 500 finished down for three weeks in a row.

A U.S. small-cap index outperformed by a wide margin, as the Russell 2000 Index recorded a weekly return of more than 5%. The latest week’s gain marks a brief turnaround for an index that fell more than 20% in 2022, slightly worse than the declines for its large- and mid-cap peer indexes.

U.S. prices rose at a 6.5% annual rate in December as measured by the Consumer Price Index, marking the smallest year-over-year increase since October 2021. Excluding food and energy costs, core inflation rose by 0.3% relative to the previous month, in line with economists’ average forecast.  

A handful of major U.S. banks kicked off earnings season with mixed results. As of Friday, analysts were forecasting that fourth-quarter earnings for companies in the S&P 500 fell by an average of 3.9%, which would mark the first year-over-year decline since the third quarter of 2020, according to FactSet.

An index that measures investors’ expectations of short-term U.S. stock market volatility fell nearly 13%, marking the second weekly decline in a row for the CBOE Volatility Index. The index, also known as the VIX, is down about 45% from a recent peak in mid-October

The price of U.S. crude oil climbed to around $80 per barrel on Friday to record a weekly gain of about 8%—roughly equal to the size of the previous week’s decline. The latest rise was driven in part by an improved demand outlook owing to moderating U.S. inflation and China’s easing of COVID-19 restrictions.

The price of Bitcoin, the most widely traded cryptocurrency, surged around 15% to around $19,500—the highest level in more than two months. Nevertheless, it’s well below Bitcoin’s 2022 peak of more than $47,000 in late March.

A report scheduled to be released on Wednesday will provide an update on U.S. retail sales activity during the holiday shopping season. The data on December sales follows a November report that recorded a 0.6% sales decrease—the biggest decline in 11 months.

Source: John Hancock Investment Management

TD Ameritrade 2022 Tax Forms

Heal Thyself!

Scientists have been developing smart materials that can heal themselves. These substances have the potential to make everything from bridges to bicycles more durable by repairing damage as it occurs. Last week, we learned that self-healing materials were engineered and used by the ancient Romans.

For years, scientists have marveled at the durability of Roman concrete. It was used to build the Pantheon Dome, harbors, and other structures, and proved to be more robust than modern concrete. The Pantheon was built two thousand years ago, and it remains the world’s largest unreinforced concrete dome.

Scientists recently discovered that Roman concrete included lime clasts, a material that contains calcium oxide. When damage occurred in Roman concrete, cracks would form through the lime clasts. Then, as water traveled through the crack, a calcium-saturated solution would form and crystalize, repairing the crack.

Knowing the secret to the durability of Roman concrete is likely to improve modern concrete and extend the lifespan of many types of infrastructure. Concrete isn’t the only material that has the potential to repair itself, though. Scientists are engineering other smart materials to fight the effects of age, wear-and-tear, and defects in all kinds of products. Typically, these substances contain microcapsules filled with some type of repair material. When damage occurs, the microcapsules rupture, releasing their contents to combine with a catalyst and repair the damage. In some cases, the catalyst is water, light, or another environmental factor. In other cases, the catalyst is engineered into the material, too.

Self-healing materials could have many interesting applications. Imagine airplanes that can repair wing and fuselage cracks. The same might be possible for spaceships, satellites, automobiles, motorcycles, and bikes. Already, there is a coating that mends scratches in automobile paint. All you need is a self-healing clearcoat and some sunshine.

The global market for self-healing materials is expected to grow rapidly.

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