Weekly Investment Commentary: S&P 500 and Nasdaq Surrender 50-day Moving Averages

The stock market endured a volatile week as uncertainty related to the Omicron variant of the coronavirus dominated the conversation. The Dow and S&P 500 lost a respective 0.9% and 1.2% for the week while the Nasdaq underperformed, falling 2.6%.

Concerns related to the new coronavirus variant appeared to be on the backburner during a Monday rebound from last Friday’s loss, but selling pressure returned to the market as the week went on, driving the S&P 500 past its 50-day moving average (4544.74) while the Nasdaq also fell below its 50-day moving average (15276.38), reaching its lowest level since late October.

Nine out of eleven sectors ended the week in negative territory with communication services (-2.8%), consumer discretionary (-2.4%), and financials (-2.0%) recording the widest losses while the real estate sector (+0.1%) and utilities (+1.0%) finished the week in positive territory.

Growth stocks were among the weakest performers with the likes of  Amazon (AMZN) ,  Microsoft (MSFT) , and  Tesla (TSLA)  losing between 1.8% and 6.2%. In earnings,  DocuSign (DOCU)  plunged to its lowest level since mid-2020 after disappointing guidance overshadowed a Q3 beat.

Like stocks, crude oil faced a volatile week, failing to hold its 200-day moving average (69.88). WTI crude ended the week lower by $1.79, or 2.6%, at $66.38/bbl. OPEC+ announced on Thursday that it is keeping its plan for a 400,000-bpd output increase in January.

In Washington, Fed Chairman Powell said during his Congressional testimony that the word “transitory” should no longer be used when describing inflation. He added that the central bank may bring forward the planned end of asset purchases by a few months and that an acceleration of the taper will be discussed at the policy meeting in December. Separately, Congress voted in favor of another short-term funding bill that will delay the risk of a government shutdown into mid-February.

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Updated: 03-Dec-21

A weekly recap of market activity and events, featuring commentary, analysis written with individual investors in mind.

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