Stocks To Be Tested As First NFP Data In 2022 Will Arrive Soon!

After a stellar 2021, stocks head into 2022 with a tailwind. However, the course of the market in the new year will depend more on solid earnings growth and a strong economy than a super easy Federal Reserve.

The S&P 500 rose 27% to 4,766 last year, notching 70 record closing highs. The benchmark outpaced the 19% gain in the Dow Jones Industrial Average and the 21% rise in the Nasdaq Composite.

The employment report is the most important data, as it also includes the ISM manufacturing survey data and auto sales, both slated for Tuesday. International trade data will be released on Thursday. Traders now expect 405,000 jobs were added in December, up from 210,000 in November. The unemployment rate is expected to slide to 4.1% from 4.2%.

The 2021 market was bifurcated with an initial surge in some high-flying growth stocks, but then many of those names fell hard, and some of the big-cap names in the S&P 500 turned in super-charged performances. Microsoft was up 51% for the year, while Apple gained 34%. Home Depot was up 56%, and American Express gained 35%. Ford was up 136%.

On Wednesday, the Fed will release minutes from its December meeting. Following that meeting, the central bank announced it would speed up the tapering of its once $120 billion a month bond-buying program, now ending it by March instead of June. The March meeting is now viewed as the first opportunity for the Fed to move on a rate hike. The Fed has forecast three for 2022.

The market now foresees 2022 to be choppier for the stock market, as the Fed ends its bond purchases and moves to raise interest rates from zero. The impact of tightening policy will be felt globally, as other central banks also reduce their asset purchase programs and move toward raising interest rates.

Strong corporate earnings also boosted US stocks, the estimated year-over-year earnings growth rate for 2021 is 45.1%, according to FactSet data. That would mark the highest annual earnings growth rate for the index since FactSet began tracking the metric in 2008.

The economic and earnings rebound that started in 2020 carried over into 2021, lifting equity markets to record highs. While returns in 2020 were driven by price-to-earnings multiple expansion, returns in 2021 were driven by earnings growth. We believe the story in 2022 will be focused on value again as most of the stocks are very expensive at this moment.




Asia’s fastest-growing brokerage firm and disruptive force in the trading industry. Delivers unparalleled fund safety and world-class trading education.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

5 lessons I learn from David & Neil’s Trend Spark Indicator

In UK if I declare bankruptcy who makes payment for court order costs awards against me for…

Real Estate Investing For Beginners

3 Money Rules I Follow To Avoid Going Broke Again

A Man Showing 3 Money Rules He Follows To Avoid Going Broke Again

Coordinate Retirement Plans with Your Spouse

Playing Defense & Easy Money

The Fastest Path to Financial Independence is the Wrong One

Towards Aware and No-Harm Investing

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Fullerton Markets

Fullerton Markets

Asia’s fastest-growing brokerage firm and disruptive force in the trading industry. Delivers unparalleled fund safety and world-class trading education.

More from Medium

Just like Life, Investing is like a Teeter-Totter

Farewell, Capital One.

Data Analysts Guide to become AirBnB Host

PART6: Introduction to different Asset Classes