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I hope everyone is refreshed and excited ready to go.  I’m sure there was a lot of reflection this weekend over 2021 and musing about 2022.  The way the market finished out the year speaks to the growing anxiety after a tough November.  Essentially, there were two markets last year. While the initial burst and rotation into new sectors, rather than sitting on the sidelines, played a big role in great full year prints, people feel a lot different.  The 28.7% total return for the S&P 500 was the 21^st best since 1926, but December was dominated by strong gains in defensive sectors

Investor bullishness climbed to a six-week high but nowhere near levels seen early in the year.

The way we ended looked different than the entire year.

Full Year 2021

December 31, 2021

NASDAQ Stumbles

Carnage in the NASDAQ continued to be the emerging story as we exited last year with larger names feeling the heat.

Breadth was better, but out of favor names continued to get pounded resulting in twice as many 52-week lows than highs for the week.

Market Breadth	NYSE	NASDAQ
Advancers	2,331	2,396
Decliners	1,220	2,690
52-Week Highs	322	325
52-Week Lows	189	768
Up Volume	7.2 billion	8.2 billion
Down Volume	6.7 billion	9.6 billion

Today should be interesting. The NASDAQ got an early pump from monster numbers from Tesla (TSLA), which saw 308,000 deliveries in the fourth , and 936,000 for the year, smashing all Wall Street estimates.

But that early pop is waning a bit as bond yield are surging this morning.

Ten Year Yield Spiking

I’m not sure why the year bond yields are spiking, but it’s going to cast a dark cloud over tech; although, that narrative is exaggerated and would not be a reason to sell tech positions.

Ten Year yield – five-year chart

Portfolio Approach

This morning we took profits in Consumer Discretionary in our Hotline Model Portfolio. If you are not a current subscriber to our Premium Hotline service, email Info@wstreet.com to join and start your New Year investing in stocks.

 

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