Financial data and news summary for the week ending December 24, 2021

 Source:

http://creditbubblebulletin.blogspot.com/2021/12/weekly-commentary-just-facts-december.html

Credit Bubble Bulletin
Friday, December 24, 2021
by Doug Noland

Following is my edited easy to read version
Ye Editor

For the week ending December 24, 2021:

S&P500 rallied 2.3% (up 25.8% y-t-d)

Dow Industrial rose 1.7% (up 17.5%)

Utilities were little changed (up 11.7%)

Banks gained 1.4% (up 34.1%)

Transports rose 2.3% (up 29.4%)

S&P 400 Midcaps jumped 2.5% (up 21.2%)

Small cap Russell 2000 up 3.1% (up 13.5%)

Nasdaq100 advanced 3.2% (up 26.5%)

Semiconductors surged 4.6% (up 40.7%)

Biotechs increased 1.3% (down 1.6%).

With gold bullion up $19,
the HUI gold stock index up 2.5% (down 15.3%).

U.K.'s FTSE gained 1.4% (up 14.1% y-t-d).

Japan's Nikkei increased 0.8% (up 4.9% y-t-d)

France's CAC40 jumped 2.3% (up 27.7%)

German DAX added 1.4% (up 14.9%).

Spain's IBEX 35 rallied 3.0% (up 6.1%).

Italy's FTSE MIB advanced 1.5% (up 21.5%)

Brazil's Bovespa fell 2.2% (down 11.9%)

Mexico's Bolsa gained 0.9% (up 19.9%).

South Korea's Kospi slipped 0.2% (up 4.8%).

India's Sensex added 0.2% (up 19.6%).

China's Shanghai declined 0.4% (up 4.2%).

Turkey's Istanbul National 100 fell 9.3% (up 28.1%).

Russia's MICEX declined 0.6% (up 12.6%).

BONDS  &  MORTGAGES:

Three-month Treasury bill rates
ended the week at 0.055%.

Two-year government yields
rose five bps to 0.69% (up 57bps y-t-d).

Five-year T-note yields
gained seven bps to 1.24% (up 88bps).

Ten-year Treasury yields
jumped nine bps to 1.49% (up 58bps).

Long bond yields
rose 10 bps to 1.91% (up 26bps).

Fannie Mae MBS yields
gained six bps to 2.09% (up 74bps).

Federal Reserve Credit
last week surged $66.7bn
to a record $8.742 TN.
Over the past 119 weeks,
Fed Credit expanded $5.015 TN,
or 135%.

Freddie Mac 30-year fixed mortgage rates
dropped seven bps to 3.05% (up 39bps y-o-y).

Fifteen-year rates
fell four bps to 2.30% (up 11bps).

Five-year hybrid ARM rates
dropped eight bps to 2.37% (down 42bps)

Jumbo mortgage 30-year fixed rates
down six bps to 3.18% (up 25bps).

COMMODITIES:

Bloomberg Commodities Index
rallied 2.6% (up 26.7% y-t-d).

Spot Gold gained 1.1% to $1,817 (down 4.3%).

Silver up 2.9% to $23.02 (down 12.8%).

WTI crude oil up $2.93 to $73.79 (up 52%).

Gasoline rose 4.0% (up 56%)

Natural Gas up 1.1% (up 47%).

Copper gained 2.3% (up 25%).

Wheat surged 5.1% (up 27%)

Corn rose 2.1% (up 25%).

Bitcoin rallied $4,659, or 10%,
this week to $51,061 (up 76%).

NEWS  FROM  LAST  WEEK:

Coronavirus Watch:

December 23 – Reuters:
“Rising COVID-19 infections in China's city of Xian have spurred a lockdown of its 13 million residents, with stretches of highway eerily bare on Thursday, as many people queued in the cold to get their noses swabbed at testing sites… The daily count of domestically transmitted infections with confirmed symptoms in the northwestern city, famed for its terracotta warriors buried with China's first emperor, has increased for six straight days since Dec. 17.”

December 22 – Reuters:
“The White House will deploy 1,000 military medical personnel to support hospitals facing a surge of patients infected with Covid this winter, and will purchase 500 million at-home tests that Americans can order online for free with delivery beginning in January ... ”

December 20 – Wall Street Journal:
“The CDC said… Omicron had overtaken the Delta variant of the coronavirus in the U.S. and accounted for an estimated 73% of infections for the week ending Dec. 18. In many parts of the U.S., Omicron now makes up more than 90% of cases ... Infectious-disease experts have said they believe the true share is likely even higher than that.”

December 19 – New York Times:
“A growing body of preliminary research suggests the Covid vaccines used in most of the world offer almost no defense against becoming infected by the highly contagious Omicron variant.'

December 23 – CNBC:
“The health-care industry lost 450,000 workers from February 2020 through November, mostly nurses and residential-care employees… What’s more, the highly mutated and contagious omicron variant can more easily infect vaccinated employees than previous strains. That threatens to further exacerbate the staffing shortage by sending workers home to isolate, even if they have mild or no symptoms.”

December 19 – Wall Street Journal:
“Many hospitals have few beds available to handle an influx of Omicron-driven cases, because their intensive-care units are flooded with patients needing urgent care for serious conditions such as heart disease and cancer as well as the Delta variant. ... Nationwide, 92 cities had hospitals with average intensive-care occupancy at 100% or more earlier this month, according to the most recent data from the University of Minnesota Covid-19 Hospitalization Tracking Project.”

Market Mania Watch:

December 22 – Wall Street Journal:
“Sitting atop a haul of strong earnings, companies are planning to spend even more in 2022 on share buybacks and dividends, a trend finance executives don’t expect to slow…For the year about to close, share repurchases at companies in the S&P 500 are expected to have hit an estimated record of $850 billion, up 63.6% from last year… and 16.6% from 2019. In the third quarter of this year, buybacks topped $234.6 billion, exceeding the previous $223 billion record, set in the fourth quarter of 2018.

December 22 – Bloomberg:
“More than half of this year’s 481 U.S. IPOs are trading below their offer prices… These deals, excluding an even longer list of special purpose acquisition companies, collectively set a record of about $167 billion, easily beating 2020.”

December 21 – Bloomberg:
“In 2021, at least 40 residential properties sold for more than $50 million in the U.S., according to… appraiser Miller Samuel. That’s about a 35% increase over 2020, which was also a record year.”

Inflation Watch:

December 19 – Wall Street Journal:
“Lumber futures for January delivery ended Friday at $1,089.10 per thousand board feet, twice the price for a prompt delivery in mid-November… Pricing service Random Lengths said that its framing composite index, which tracks on-the-spot sales, has jumped 65% since October, to $915. A $129 gain this week was the biggest on record, eclipsing a $124 jump in May, when lumber prices crested at all-time highs.”

Biden Administration Watch:

December 23 – Bloomberg:
“When the trade deal between China and the U.S. was signed in January 2020, there was some hope it would lead to a reduction in bilateral tensions and restore some balance to trade, but those goals are proving elusive as 2021 comes to a close. In the 23 months since then-President Donald Trump signed the phase-one agreement, Chinese imports from the U.S. have indeed hit a new record. However, as of the end of last month Beijing was well behind on promises made -- buying little more than 59% of the extra $200 billion in manufactured, agricultural and energy goods it said it would by the end of 2021.”

Federal Reserve Watch:

December 23 – New York Times:
“The Personal Consumption Expenditures price index, which is the one the Fed officially targets when it aims for 2% annual inflation on average over time, climbed 5.7% in November from a year earlier… Part of the jump owed to gasoline prices… but a so-called core index that strips out food and fuel prices also increased sharply, to 4.7%. The sharp run-up in inflation this year, and the fact that it has lingered, leaves policymakers and economists trying to assess what will happen in 2022.”

U.S. Bubble Watch:

December 23 – Bloomberg:
“Purchases of goods and services, after adjusting for higher prices, were little changed following a 0.7% gain in October… The personal consumption expenditures price gauge, which the Federal Reserve uses for its 2% inflation target, increased 0.6% from a month earlier and 5.7% from November 2020, the highest reading since 1982.”

December 22 – Wall Street Journal:
“Existing-home sales, which rose in November to the highest seasonally adjusted annual rate since January, are on track for their strongest year since 2006 as low mortgage-interest rates and a robust job market drive up demand. Sales of previously owned homes rose 1.9% in November, climbing for the third straight month”

December 22 – Bloomberg:
“... Data from July showed that 18% of Americans hold medical debt that has been sent to collection agencies. And according to a new West Health-Gallup 2021 Healthcare in America Report, 30% of Americans reported deferring medical care in the prior three months due to cost, a figure that has tripled since March 2021.”

December 23 – CNBC:
“There are nearly 22 million people in the U.S. with enough assets to fit the definition of millionaire, according to a 2021 study by Credit Suisse.”

China Watch:

December 22 – Wall Street Journal:
“The Winter Olympics in China in six weeks have problems. They’re in the winter. They’re in China. And they’re in six weeks. The explosive spread of the highly contagious Omicron variant of the coronavirus is quickly presenting one of the most complicated possible Covid-19 scenarios for the 2022 Beijing Games. Thousands of athletes from dozens of countries are on course to head to the place where the pandemic began almost exactly two years ago but which has yet to experience this wave.”

December 20 – CNBC:
“China’s central bank cut a benchmark lending rate on Monday for the first time since April 2020, during the height of the coronavirus pandemic in the country. The People’s Bank of China lowered the one-year loan prime rate to 3.8%, down from 3.85%... The last time the central bank cut the one-year and five-year LPR was in April 2020… The LPR affects lending rates for corporate and household loans.”

December 19 – Bloomberg:
“December is poised to be a record month for Chinese offshore corporate defaults after missed payments by indebted companies including China Evergrande Group and Kaisa Group Holdings Ltd. Chinese firms have defaulted on a record $3.8 billion in offshore bonds so far this month, data compiled by Bloomberg show. The previous monthly high was in January when Chinese borrowers failed to repay $2.7 billion of such notes.”

December 22 – CNBC:
“China’s struggling real estate developers ... face $19.8 billion in maturing offshore, U.S.-dollar denominated bonds in the first quarter, and $18.5 billion in the second, estimates Nomura analysts Ting Lu and Jing Wang. That first-quarter amount is nearly double the $10.2 billion in maturities of the fourth quarter, the analysts said…”

December 23 – Bloomberg:
“On top of increasing offshore bond bills, developers and their contractors need to pay 1.1 trillion yuan ($173bn) in deferred wages to migrant construction workers by the end of the Lunar Year, according to Nomura… In 2022, that falls on Jan. 31. Beijing has made it clear that failing to pay workers on time is not an option given the risk of unrest just before the Beijing Winter Olympics."

Europe Watch:

December 21 – Bloomberg:
“This year’s energy crunch is threatening to derail Europe’s economic recovery as gas and electricity costs soar to fresh records. Prices surged more than 20% on Tuesday after Russia curbed gas flows to Europe and France, usually a power exporter, was forced to boost electricity imports and burn oil to keep the lights on. Higher costs have forced some companies to shut down or curb output.’”

December 22 – Bloomberg:
France, facing outages at nuclear plants, will need to suck up supplies instead of exporting power to neighboring countries. The situation is so severe that it is forcing factories to cut output or shut down altogether. Aluminium Dunkerque Industries France has curbed production in the past two weeks due to high power prices, while Trafigura Group’s Nyrstar will pause its zinc smelter in France in the first week of January. Romanian fertilizer producer Azomures SA temporarily halted output.”

Social Watch:

December 21 – Reuters:
“United States' population grew at a slower rate in 2021 than in any other year on record ... 2021 is the first time since 1937 that the U.S. population grew by fewer than 1 million people, reflecting the lowest numeric growth since at least 1900, when the Census Bureau began… estimates. The population of the United States increased in the past year by 392,665, or 0.1%...”

Geopolitical Watch:

December 22 – Reuters:
“President Vladimir Putin said… Russia had no room to retreat in a standoff with the United States over Ukraine and would be forced into a tough response unless the West dropped its ‘aggressive line’. Putin addressed his remarks to military officials as Russia pressed for an urgent U.S. and NATO reply to proposals it made last week for a binding set of security guarantees from the West. ‘What the U.S. is doing in Ukraine is at our doorstep... And they should understand that we have nowhere further to retreat to. Do they think we’ll just watch idly?’ Putin said. ‘If the aggressive line of our Western colleagues continues, we will take adequate military-technical response measures and react harshly to unfriendly steps.’”