The Profit Margin: January 10, 2022

Statistic of the Week

Print book sales in the US totaled 825.7 million copies for 2021. This represents an 8.9% year-over-year jump. However, data from Pew indicates that the number of Americans that read print editions remained the same. The increase is attributed to a significant rise in young adult fiction sales – up 30.7%.

Global Perspective

The year’s first giant bluefin tuna sold at auction in Tokyo was a disappointment. Weighing in at 465 pounds, the fish sold for $145,000. While still a significant sum, in the pre-pandemic years, a similar fish would have been sold in the millions. The record was set in 2019 when a Japanese sushi chain owner paid $2.9 million for a giant tuna.

Market Moving Events

Tuesday: NFIB Small-Business Index Wednesday: Consumer Price Index, Federal Budget, Beige Book Thursday: Jobless Claims, Producer Price Index Friday: Retail Sales, Industrial Production, Consumer Sentiment

Commentary

It was a topsy-turvy start to the New Year. The release of last month’s Federal Reserve meeting minutes soured what had initially been an upbeat mood. While investors were aware that the Fed was planning on completing its taper process in March, and there was some speculation as to whether there would be two or three interest rate hikes in 2022, the revelation that the central bank was also considering shrinking its balance sheet simultaneously caused concern that the Fed was tilting hawkish faster than expected. Since March of 2020, the Fed has added about $4.5 trillion in Treasuries and mortgage-backed securities to its balance sheet, bringing it up to about $9 trillion total.1 This revelation caused the DJIA to drop about -0.29% on the week, the S&P 500 fall -1.87%, and the Nasdaq to take a -4.53% dip.2 At the same time, the 10-year Treasury finished the week with a yield of 1.77%, up 0.27% from the week prior and hitting levels last seen in January 2020.3 The increase in Treasury yields is causing the “repricing” of growth assets– specifically those represented in the Nasdaq. This week, Jay Powell’s Senate confirmation hearing, inflation readings in the CPI and PPI, reports on retail sales and consumer sentiment, and earnings releases from key financials, make for a news-heavy week with the potential for higher volatility. – Dan McElwee, CFP, ® MBA

Chart of the Week

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Sources

Statistic of the Week:
Forbes, Pew

Global Perspective:
Bloomberg Business

Market Moving Events:
MarketWatch.com

Chart of the Week:
Haver, Clearnomics, Bureau of Labor Statistics

Commentary:1. Investor’s Business Daily2.Bloomberg3.Investor’s Business Daily