Many of the institutions and brokerage houses took the holiday week off. With most of the professionals taking the week off, the markets were let to retail investors, also known as us amateur investors. As a result, the trading volume was considerably less than normal causing share prices to be more erratic. While December was not a great month for the markets there was some good news. There was confirmation the interest rates in the US will rise in 2022, although we don’t know by how much. As well, the Omicron virus is more contagious than its Covid-19 predecessors, but it does not appear to be as deadly. Another bit of good news to usher out 2021 was all four indexes had a great year, the third in a row, with the 3 American Indexes up over 20% for 2021 and the TSX up over 21% for the year. On that note, let end on a positive and optimistic note. May the markets continue their strong growth through 2022 and beyond, and hopefully inflation and Omicron, and its siblings, will not hang over us throughout 2022.
Weekly Market Review
Monday: A banner day for the US markets with all three Indexes – S&P 500 (S&P), Dow Jones Industrial Average (DJIA) and Nasdaq Composite Index (Nasdaq) – all seeing a strong boost thanks to an 8.5% year over year boost in retail sales this holiday season. The S&P ended the day at a record high and has increased 4.9% during since the start of four straight positive sessions. Despite the recent run up in the Indexes, Omicron still lurks in the shadows weighing on travel stocks as airlines cancelled hundreds of flights over the holidays, and cruise lines reported Omicron outbreaks.
The Toronto Stock Exchange Composite Index (TSX) was closed and will resume trading Wednesday. Let us hope it follows the lead of the American markets and Indexes.
Tuesday: Despite reaching a record intraday high, the S&P finished the day lower which ended its four-session rally. The Nasdaq also ended the day down while the DJIA was the lone bright spot ending the day in positive territory. Trading volume was well below average as investors enjoy the holiday season.
Wednesday: Despite a surge in Omicron infections, investors’ concerns appear to be eased by reports of reduced risk of hospitalizations from the virus as they pushed the markets higher today. The DJIA rose for the sixth straight day to close at an all time high. This is the DJIA’s longest winning streak since early March 2021. The S&P got back on the winning track, after snapping its winning streak yesterday, to close the day at a new record high. The TSX was up for the fifth straight day on the strength of the financial and energy sectors. Meanwhile, the Nasdaq was the only Index to finish down for the day.
Thursday: During today’s trading session, the DJIA and S&P briefly reached record highs before joining the TSX and Nasdaq in negative territory to close out the day on another light trading day. Once regular trading volumes return next week it will be interesting to see how much of a shadow Omicron casts on investor sentiment.
Friday: On a light day of trading to end 2021, all four Indexes ended the day in negative territory.
All four Indexes ended December higher than they started but it was not a straight line by any means. The Indexes were up and down like a yoyo, buffeted by concerns about interest rates, and fears of how Omicron would impact the economy. The Santa Claus rally finally started in late December, when worries about Omicron eased, and continued through until the end of the month before tapering off at the end of the month.
Weekly Portfolio Review
After last week’s strong showing by all three Portfolios, I was surprised to see all the Portfolios were down when two of the four Indexes were up for the week (rounding caused the TSX to appear breaking even). I guess since the technology heavy Nasdaq Index was down for the week it does not bode well for technology biased portfolios. Some weeks you are the hammer, some weeks you are the nail. This week I was the nail. ☹
For the month
Not the best month for Portfolios 1 and 3 down nearly 5%, respectively. I admit I was a bit surprised to see them down that much when all four of the Indexes gained ground for the month. On the bright side, Portfolio 2 had a strong month up nearly 8%, beating all 4 Indexes handily. It still has a technology bias but not as much as the other Portfolios. Something to keep in mind when reviewing the Portfolios for 2022.
Companies on the Radar
No new companies appeared on the radar this past week. I am hoping to have some time in the coming weeks to finally be able to take a closer look at:
After December’s performance I am leaning toward solid, proven companies like American Tower and Stella Jones. Matterport still interests me as a play on the growing Metaverse theme but the whole metaverse thing could be a year or two away and it will be a bumpy ride.
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended December 31, 2021: DOWN 
Looking at Portfolio 1, the numbers would have looked a lot better if the week ended on Thursday with most of the stocks drifting down on Friday. Other than Tesla (NASD:TSLA) (down over USD $50), there was no company that had a sizable fall last week. Nearly all of the companies trended up throughout the week and gave back their gains and a bit more on Friday.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
No dividends this past week.
Canadian $
Canadian National Railway Co (TSX:CNR)
Shaw Communications Inc (TSX:SJR.B)
US $
ZIM Integrated Shipping (NYSE:ZIM)
Earnings Reports
No quarterly earnings reports this past week.
Portfolio 2
Portfolio 2 for the week ended December 31, 2021: DOWN
As with Portfolio 1, the numbers would be much better if investors stopped trading on Thursday. The only thing I can think of is investors were taking some money off the table on Friday as 2021 came to a close.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
No dividends this past week.
Canadian $
Brookfield Infrastructure Corp (TSX:BIPC)
Brookfield Infrastructure Corp LP (TSX:BIP.UN)
US $
No US$ dividends this past week.
Earnings Reports
No quarterly earnings reports this past week.
Portfolio 3
Portfolio 3 for the week ended December 31, 2021: DOWN
On the TD WebBroker home page, once you login, there is a section highlighting the top movers in the portfolio. Ideally you want to see all five companies listed with a green up arrow. Often, you will see a mix of green up arrows and red down arrows. What you do not want is five red down arrows. On Friday, Portfolio 3 had five red down arrows, led by Shopify (TSX:SHOP) down 2.24%, or nearly CAD $40, on the day. Sigh!
Crypto update: Ethereum bought at CAD $6,137.23 per coin. On January 1, 2022, it was trading at CAD $4,747.09. I definitely picked the wrong time to get back in the cryptocurrency market.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Brookfield Renewable Corp (TSX:BEPC)
Brookfield Asset Management Reinsurance Partners Ltd (TSX:BAMR)
US $
No US$ dividends this past week.
Earnings Reports
No quarterly earnings reports this past week.