In the penultimate week of 2022, the stock market experienced typical end of year volatility. Generally, this resulted in stocks rounding out the week at a lower point.

Investors React to Inflation Data Amidst End of Year Volatility

Notably, the latest inflation data came out last week, sparking the end of year volatility. According to the Bureau of Economic Analysis, inflation rose by only 0.1% in November 2022.

Now, investors digest this information while simultaneously anticipating the Federal Reserve’s response. After more than a year of record inflation levels, investors hope this marks the latest sign that inflationary pressures reached their peak. If this is the case, the data might influence the Federal Reserve to scale back its interest rate hikes.

China Experiences Surge in COVID-19 Cases

Further fueling the end of year volatility, China revealed news of their latest surge in COVID-19 cases. Due to this news, investors potentially expect further government-imposed lockdowns. If this occurs, the lockdowns hold heavy potential to influence the global economy.

Diving into the numbers, Ten-Year Treasury Yields advanced the most since April 2022. Meanwhile, the dollar edged lower. On the other hand, gold prices climbed higher. Finally, crude oil prices increased for the second week in a row. As a result, crude oil prices approach $80.00 per barrel.

Eye on the Week Ahead After End of Year Volatility

Despite last week’s end of year volatility in the stock market, trading tends to die down during the final week of the year. Typically, investors take a break while preparing for the new year.

Additionally, very little economic reporting comes out between Christmas and New Year’s Day. In the meantime, investors look towards the Federal Reserve for updated projections on their increases to the federal funds rate.

To reevaluate your financial goals in 2023, contact the financial advisors at IHT Wealth Management.

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Information accredited to Broadridge.