(CNBC) — It’s back to business in the week ahead with a busy economic calendar to start the new year, including the always important monthly jobs report.
After a stellar 2021, stocks head into 2022 with a tailwind, but 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 in a banner 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.
With Monday’s opening bell, the clock starts ticking on a quarter that could see the first Fed rate hike since 2018. In the bond market, worries about the latest omicron Covid-19 variant could give way to an investment community more intent on a reset of expectations for where interest rates are heading over the course of 2022.
The employment report is the most important data on a calendar that also includes the ISM manufacturing survey data and auto sales, both slated for Tuesday. International trade data is released Thursday.
According to Dow Jones, economists expect 405,000 jobs to be added in the final month of 2021, 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%.
The ARK Innovation ETF, a high-flying collection of growth stocks in 2020, was down 24% for the year.
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.
Energy was the top performer of the major sectors in 2021, up 48%, its best increase ever. It was followed by real estate, which jumped 42%. Technology was up 33%, and financials also gained 33%.
The actions of OPEC+ have been a key factor driving oil prices and oil stocks this past year. West Texas Intermediate futures were up about 55% in 2021.
OPEC+ meets Tuesday and is expected to continue its policy of slowly returning oil to the market.
Week ahead calendar
9:45 a.m. Manufacturing PMI
10:00 a.m. Construction spending
10:30 a.m. ISM manufacturing
10:00 a.m. JOLTS
8:15 a.m. ADP employment
9:45 a.m. Services PMI
2:00 p.m. FOMC minutes
Earnings: Bed Bath and Beyond, Constellation Brands, Conagra, Walgreen Boots Alliance, PriceSmart, WD-40, Lamb Weston
8:30 a.m. Initial claims
8:30 a.m. International trade
10:00 a.m. ISM services
10:00 a.m. Factory orders
1:15 P.M. St. Louis Fed President James Bullard
8:30 a.m. Employment report
10:00 a.m. San Francisco Fed President Mary Daly
12:15 p.m. Atlanta Fed President Raphael Bostic
12:30 p.m. Richmond Fed President Tom Barkin
3:00 p.m. Consumer credit
12:15 p.m. Atlanta Fed’s Bostic
Original Article By: Patti Domm
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