2022 | December 12

The Market

Stocks Fall

After two positive weeks in a row, the major U.S. stock indexes fell around 3% to 4%. Investors worried that recently mixed inflation data could challenge the U.S. Federal Reserve’s expectations of slowing the pace of interest-rate increases.

A report released on Friday showed the prices that U.S. suppliers charge goods producers rose at a slower annual rate in November than they had in the previous month. However, on a month-to-month basis, the Producer Price Index’s 0.3% increase was slightly above economists’ consensus forecast for a 0.2% rise.

The price of U.S. crude oil fell around 11% for the week to less than $72 per barrel. The latest weekly decline pushed oil prices into negative territory on a year-to-date basis, as oil ended 2022 around $75. The latest price is down nearly 23% from a recent high in early November.

China’s government on Wednesday eased some of the strict COVID-19 rules that have recently weighed on the world’s second-largest economy. Leading up to the announcement, a Chinese stock index rallied for five consecutive weeks in anticipation of the policy changes. 

Officials with the World Bank and the International Monetary Fund on Friday expressed concerns about a worsening outlook for the global economy and the potential for a recession. The IMF currently forecasts global growth will slow to 2.7% in 2023, down from expectations of 3.2% this year.

An index that measures investors’ expectations of short-term U.S. stock market volatility rose around 19%, climbing for just the second week out of the past eight. In the previous week, the Cboe Volatility Index slipped to the lowest level since mid-August.

At its next meeting ending on Wednesday, the U.S. Federal Reserve is expected to lift its benchmark interest rate for the seventh and final time of 2022. The meeting comes after Chair Jerome Powell confirmed in a recent speech that the Fed could begin to shift to smaller interest-rate increases this month to try to tame inflation. Officials approved rate hikes of three-quarters of a percentage point at each of their last four meetings.

A Consumer Price Index report scheduled to be released on Tuesday will show whether the recent moderation in inflation extended into November. In October, inflation rose at an annual 7.7% rate—down from 8.2% in September—and 0.4% on a month-to-month basis. Both figures were below the levels that most economists had expected.

Source: John Hancock Investment Management

Federal Funds Rate

Feeling Some Holiday Stress?

Holidays can be wonderful, and they can be a lot. If the joy of the season is eclipsed by stress, anxiety or depression, here are some tips that can help.

• Pet a pup. Find a few minutes to spend with your pets. Loving on animals – dogs, cats, bunnies, guinea pigs, reindeer – engages the social and emotional section of the human brain. As a result, it can help you cope when you feel stressed or depressed.

• Find the humor. Humor can help, too. When kids find the gifts and unwrap them early, the cat tips the tree over – again, or your parents or in-laws say things they shouldn’t, try to find the ridiculous, over-the-top angle that makes it funny. If you just can’t, try smiling. Even a fake smile will cause endorphins to be released.

• Reach out. Performing acts of kindness can lift your spirits during the holidays. Set up a food drive. Donate gifts to a homeless shelter. Make a charitable contribution to an animal rescue or another cause. Visit people in a nursing home. Run a race for a good cause. You get the idea.

• Spend less. One of the biggest holiday stressors is money. Before you start shopping and entertaining, decide what you can afford to spend this year, and then stick to your budget. If you regularly overspend on gifts, decide how much you are going to spend and stick to it. Ways to control costs include making homemade gifts and donating to a good cause in the recipient’s name.

• Just say “No.” You don’t have to accept every invitation this season. When you’re tired of people and celebrations, make time to do something that you enjoy. Listen to music. Take a walk. Watch funny videos. Read a book. Give yourself an opportunity to rest and recover.

We hope you have happy and healthy holidays!