Jobs Data Aside, Bond Yields May Be Capped by ‘New Conundrum’

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Bond market action is setting conditions in broader markets in early 2022, largely due to the Federal Reserve’s sharper December minutes.

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The yield on the 10-year Treasury has risen nearly 22 basis points to 1.725% this year. The rate hike likely saw yields rise as soon as March and contributed to a subsequent technical stock route.

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The countdown to potential growth in March has focused on incoming data, particularly monthly job numbers and CPI inflation data. The first of those is Friday’s December nonfarm payroll. Talk to several Fed officials that maximum employment — one of the conditions before the rate hikes — was near, gives the data a high degree of importance.

Economists expect 422,000 jobs were added last month. Bond yields would need a strong reading, or close to consensus, to continue. It would be a great surprise in any way to actually change the mood significantly.

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It’s also worth noting that the payroll survey ended on December 18, according to Goldman Sachs.,
Before the sharp spike in Omicron coronavirus variant cases actually started. So it may be another month before we know the extent of the version’s impact.

Yet when it comes to long-term Treasury yields, analysts at Goldman Sachs believe the “new puzzle” facing the bond market has limited the rise. They see strong upward pressure on 2-year yields, but market reluctance to price higher terminal policy rates in this hiking cycle, keeping year-end 10-year yield estimates at 2% .

If true, the rise could stop the price rotation in its tracks once again.

,Callum Keon

*** Join Investor Business Daily’s Chief Content Officer Chris Geisel and IBD’s Multimedia Content Editor Alisa Korum this afternoon, as they discuss trading strategies to help your portfolio navigate volatile market waters. register here,

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Supreme Court will consider Biden’s activist vaccine mandate

Supreme Court will listen to challenges To the Biden administration’s COVID-19 vaccine requirements in a special session today. One of the requirements says that private employers with 100 or more workers will require vaccines or weekly testing, and another says that healthcare workers at facilities receiving federal funding must be vaccinated.

What will happen next: The Labor Department will begin implementing the OSHA vaccine mandate on January 10, but the agency said it would not issue citations for violations until February 9.

,Janet H. Cho

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Gamestop Pops on Crypto, NFT Marketplace Plans

GameStop,
The videogame retailer that became a darling of meme-stock traders last year is building a business for cryptocurrency partnerships and a marketplace for non-fungible tokens, or NFTs.

What will happen next: baron’sreported that GameStop has retained consultants in this effort and has hired 20 people for its crypto and blockchain group. It is close to partnering with two crypto firms to co-invest in games that use blockchain and NFT technology, the Journal Reported,

,Liz Moyer

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Oil back to pre-Omicron levels, Shell gives buyback update

Oil prices held firm above $80 a barrel on Friday following unrest in major crude producer Kazakhstan, raising fears about potential supply problems.

What will happen next: Deutsche Bank analyst Jim Reid said oil prices are now above their pre-Omicron levels for the first time yesterday. He added that this could show that the markets “have overcome the risks that would have a significant impact on the development of the new version.”

,Pierre Briançon

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CES 2022 scenes: Metaverse, EV car, Abbott test

The metaverse, virtual reality and augmented reality were featured prominently at the annual consumer electronics trade show this year, as did electric cars, and the CEO of Abbott Laboratories was a chief health officer at the event.

What will happen next: Attendees at the event were given Abbott’s at-home COVID-19 test for the hard-to-find Binax Now. CEO Ford told baron’s The company set a target of doing 70 million tests in January and eventually increased production to 100 million per month.

,Eric J. Savitz and Janet H. Cho

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Mobile sports gambling begins this weekend in New York

New York state this weekend cleared the way for mobile sports betting in the state, a potential boon for licensed operators like DraftKings.,

Caesars Sportsbook, Flutter Entertainment‘s
FanDuel, and Rush Street Interactive,

What will happen next: Sports-betting revenue will be taxed at 51%, one of the highest rates among the 30 states where sports betting is legal. New York State estimates that mobile gambling could generate $482 million in annual tax revenue for education and gambling addiction programs.

,Karishma Vanjani and Janet H. Cho

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Do you remember this week’s news? Take our quiz about this week’s news below. Tell us how you did in email [email protected]

1. Tesla delivered blowout vehicle volume numbers for the fourth quarter with more than 308,000 vehicle deliveries, nearly how much higher than Wall Street analyst estimates?

a. 20,000

b. 30,000

C. 40,000

D. 50,000

2. Which major index did not participate in this year’s so-called Santa Claus rally, a trend where stocks typically perform well during the last five trading days of December and the first two trading days of January?

a. Nasdaq Composite

b. Dow Jones Industrial Average

C. S&P 500

D. none of these

3. FOMC minutes released this week from the mid-December policy meeting indicate that the Federal Reserve is considering raising interest rates this year:

a. February

b. procession

C. April

D. May

4. The Wall Street Journal reported that AT&T’s WarnerMedia and ViacomCBS are exploring the possibility of selling part or all of their jointly owned CW Network to which company?

To. Walt Disney

b. Comcast

C. Netflix

D. nexstar media group

5. Which auto maker this week at the Consumer Electronics Show revealed an electric vehicle that it claims is designed to provide more than 620 miles of driving in the real world on a single charge?

a. Tesla

b. General Motors

C. Ford Motor

D. Daimler / Mercedes-Benz

Answer: 1 (c); 2(a, 3(b, 4(D, 5 (d)

,baron’s staff

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-Newsletter Edited by Liz Moyer, Camilla Imperial, Steve Goldstein, Rupert Steiner

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