Market Recap and Comments (January 3 – January 7, 2022)
Stocks (SPY) fell 1.9% in the first week of 2022. Commodities (DBC) gained 2.2%. Gold (GLD) fell 1.9% after a failed mid-week rally. Bonds (TLT) plunged 4%.
All active strategies were down in the first week of 2022 except Dow 30 mean-reversion that gained 3.3%. Strategies fell 0.4% on the average.
This was a difficult week for most strategies and especially equity long/short. SPY ETF gained 0.6% in the first trading day of the year but ended the week down 1.9%. Note that for the week, SPY gained about 2 points in overnight sessions but lost 10.9 points during regular trading hours with investors and traders reacting to financial media articles about interest rates and inflation expectations.
Volatility may increase further this month due to spillover from liquidation of positions from market participants who appear to be in some panic selling mode. For example, ARKK ETF fell 10.8% for the week after massive liquidation of positions.
Strategy positions and performance as of close of Friday, January 7, 2022.
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