“Seen through the lens of human perception, cycles are often viewed as less symmetrical than they are. Negative price fluctuations are called “volatility,” while positive price fluctuations are called “profit.” Collapsing markets are called “selling panics,” while surges receive more benign descriptions (but I think they may best be seen as “buying panics”; see tech stocks in 1999, for example). Commentators talk about “investor capitulation” at the bottom of market cycles, while I also see capitulation at the top, when previously prudent investors throw in the towel and buy.” ― Howard Marks

1. Fed Project Three Interest Rate Rises in 2022 and Accelerate Stimulus Wind Down — most Federal Reserve officials signaled Wednesday they were prepared to raise their short-term benchmark rate at least three times next year to cool high inflation. Fed officials in early November agreed to reduce their then-$120-billion-a-month in bond purchases by $15 billion a month, to $90 billion this month. Officials said they would accelerate that wind down beginning next month, reducing purchases by $30 billion a month. As a result, they will purchase $60 billion in Treasury and mortgage securities in January, putting the program on track to end by March.
2. U.S. Retail Sales Slow With Holiday Shoppers Facing Inflation, Shortages — Sales at U.S. retail stores, online sellers, and restaurants rose by a seasonally-adjusted 0.3% in November from the previous month, the Commerce Department said Wednesday. That was smaller than last month’s increase in consumer prices, and a slowdown from October’s robust 1.8% sales increase. Broadly consumer demand is strong, and well above last year’s levels. Retail sales rose 18.2% in November from a year earlier, showing low unemployment, rising wages and savings from stimulus payments are giving Americans the capacity to spend more this year. That gain well outpaced the 6.8% increase in consumer prices in November from a year earlier, according to the Labor Department.
3. CDC Advisors Recommend Pfizer and Moderna’s Vaccines Over J&J’s — the 15 members voted in support of a resolution Thursday that stated the messenger RNA-based vaccines “are preferred” over J&J’s shot. The updated guidance came amid new findings from the agency about cases of a rare but serious blood clotting condition that has occurred in a small number of people who received the vaccine. In the U.S., 54 people are known to have developed the condition, known as thrombosis with thrombocytopenia, after receiving the J&J vaccine between early March and the end of August, according to a presentation made to the expert panel by CDC staffers. All of those people were hospitalized, 36 were admitted to an intensive care unit, and eight died.
4. Bitcoin Drop Risks Extending Slide to a Fifth Consecutive Week — Bitcoin fell as much as 4.3% to $46,501, and is down about 32% since reaching a record of almost $69,000 on Nov. 10. It has still gained about 60% this year. Ether, which is also coming off an all-time high set last month, declined for a second day. Central banks globally are prioritizing the fight against elevated inflation by tightening monetary settings, while also keeping a wary eye on the impact of omicron. That backdrop has investors questioning whether so-called risk assets such as cryptocurrencies and technology shares are due for a rougher patch after surging from pandemic lows.

The week ahead — Economic data from Econoday.com: