After closing red across the board during yesterday’s session, two of the three major US gauges rebounded on Friday to end the week.
The Dow Jones Industrial Average went down 0.56%, or 202 points, the S&P 500 went up 0.08% to rally just before the bell, while the Nasdaq Composite improved 0.59%.
Halfway through the session, the Dow was down roughly 077%, the S&P was off near 0.38%, while the Nasdaq was around 0.17% lower after earlier gains.
Wall Street’s 2022 struggles
After experiencing a series of milestone gains in November and December, the major US benchmarks have traded mostly in negative territory to start the New Year.
In an interview with Capital.com, Kevin Philip, managing director at investment advisor firm Bel Air in Los Angeles, said after two years of returns powered by record breaking fiscal and monetary support, “We are seeing the air come out of market.”
“The New Year has seen a dramatic shift in Fed sentiment toward inflation, and the higher valuation parts of the market are feeling the pain as they reset for a higher interest rate environment,” he continued. “Omicron, in our opinion, will significantly subside in the next two months, and we believe that we have entered a period where the economy will be growing enough for the Fed to tighten policies by ending (quantitative easing) and raising interest rates.”
However, “This will have a negative effect on growth rates and valuations, although the economy will still grow, but at lower rates, as economic strength leads to earnings growth in 2022 and positive equity returns.”
Winners & losers: Banks down
Oil: Crude over $80
Oil futures went up to close the week with West Texas Intermediate crude rising 2.1% to settle at $83.82 a barrel, notching a 6.2% gain for the week.
Gold: Metals mix
Gold futures went down on Friday as February gold lost $4.90, or 0.3%, to settle at $1,816.50 an ounce, while March silver went down 24 cents, or 1.1%, to $22.918 an ounce.
Crypto: Dogecoin soars
The prominent cryptocurrencies are mostly higher on Friday after mixing earlier in the day and wobbling up and down on Thursday.
Also, Dogecoin is up 11.30% after Tesla CEO Elon Musk tweeted the electric carmaker would begin accepting the digital asset for some of the company’s merchandise.
Shares of Tesla are 1.77% in the green.
Forex: Yields up, dollar slips
On Friday, one US dollar equals $1.25 of the Canadian dollar, $0.87 of the euro, and $0.73 of the Pound sterling.
The yield on the benchmark 10-year Treasury note went up to 1.761% Friday, from 1.708% Thursday.
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.