Friday December 30th

U.S. stock market index futures edged lower in premarket trading Friday as investors braced for the final trading day of the worst year for stocks since 2008. Futures tied to the Dow Jones Industrial Average slipped 130 points, or 0.4%. S&P 500 and Nasdaq 100 futures traded lower by 0.6% and nearly 0.9%, respectively. The overnight moves followed a rally Thursday, with the Nasdaq Composite and S&P 500 climbing about 2.6% and roughly 1.8%, respectively. The Dow jumped 345 points, or 1.05%. For the week, the Dow and S&P are slightly higher, with the Nasdaq on track for a modest loss. All major averages are lower for December and are poised to snap a two-month win streak. Friday marks the final day of trading of what’s been a painful year for stocks. A volatile bear market, sticky inflation, and aggressive rate hikes from the Federal Reserve battered growth and technology stocks. These factors also weighed on investor sentiment. All three of the major averages are marching toward their worst year since 2008, slated to snap a three-year win streak. The Dow fared the best of the indexes in 2022, down 8.58%, while the S&P and tech-heavy Nasdaq tumbled 19.24% and 33.03%, respectively. Despite the yearly losses, the Dow is on pace for a 15.65% quarterly gain and is primed to snap a three-quarter losing streak. It’s also headed for its best quarter since the second quarter of 2020. The S&P is up 7.35% and slated to break three consecutive quarterly losses. The Nasdaq’s slipped 0.92%, for its fourth  consecutive negative quarter for the first time since 2001. All major S&P sectors finished Thursday with gains, led to the upside by communication services. For the quarter, consumer discretionary and communication services are the only sectors headed for losses. Energy is the only sector on pace for yearly gains after surging nearly 58%. Communication services stocks in the S&P 500 are down more than 40% on the year and consumer discretionary has fallen 37.4%, while energy, the large-cap index’s only positive sector, has soared nearly 58%. As the calendar year turns the corner, some investors think the pain is far from over, and expect the bear market to persist until a recession hits or the Fed pivots. Some also project stocks will hit new lows. Thursday’s moves likely stemmed from a combination of short covering, value investing and momentum traders joining the rally, said Adam Sarhan, CEO of 50 Park Investments. “Nothing fundamentally has changed,” he said. “We just had a huge drop. The market’s extended to the downside, and it’s perfectly normal to see a bounce here.” On the economic front, Chicago PMI data for December is due out Friday. Next week will see a slightly more active slate for economic data, highlighted by the nonfarm payrolls report set for Jan. 6. Financial markets are closed Monday in observance of the New Year’s Day holiday. Stocks in the Asia-Pacific traded higher on its last trading session of the year after Wall Street rebounded overnight, recovering most losses from the previous day. Hong Kong’s Hang Seng index rose 0.52% in its final hour of trade, carrying on the sentiment from the U.S. session. In mainland China, the Shanghai Composite gained 0.6% to 3,092.6 and the Shenzhen Component added 0.27% to 11,025.28. The S&P/ASX 200 in Australia rose 0.26% to end its session at 7,038.7. In Japan, the Nikkei 225 was flat to end at 26.094.5 while the Japanese yen saw some strengthening to last stand at 132.42 against the U.S. dollar. Seoul’s stock markets are closed for New Year’s holiday and scheduled to resume trade on Jan. 2 an hour later than usual at 10 a.m. local time. Oil rose on Friday and was on track for a second straight annual gain in a volatile year marked by tight supplies because of the Ukraine war and weakening demand from the world’s top crude importer, China. Crude surged in March with global benchmark Brent reaching $139.13 a barrel, the highest since 2008, after Russia’s invasion of Ukraine sparked supply concerns. Prices cooled rapidly in 2022′s second half on worries about global recession. “This has been an extraordinary year for commodity markets, with supply risks leading to increased volatility and elevated prices,” said ING analyst Ewa Manthey. “Next year is set to be another year of uncertainty, with plenty of volatility.” On Friday, Brent crude was up 5 cents at $83.51 a barrel by 1105 GMT. U.S. West Texas Intermediate crude was down 12 cents, or 0.2%, at $78.28. Forr the year, Brent looked set to gain more than 7%, after jumping 50% in 2021. U.S. crude is on track to rise 4.1% in 2022, following last year’s gain of 55%. Both benchmarks fell in 2020 as the pandemic hit demand. Gold prices were set to wrap up their best quarter since June 2020 on investor expectations the U.S. Federal Reserve will slow its interest rate hikes after its fast-paced hiking cycle kept bullion gains in check. Bullion is only down about 0.7% so far in 2022, and has risen nearly $200 from a more than two-year low hit in September. On the last trading day of the year, spot gold had steadied at $1,816.05 per ounce by 1046 GMT, while U.S. gold futures fell 0.3% to $1,821.30.