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When news of the Omicron variant of Covid-19 appeared in late November, stocks sold off sharply and quickly as many investors worried that we could be rolling back into lockdowns. Moreover, Fed Chairman Powell came out after their December meeting and, rather than reversing recent ‘hawkish’ chatter, he re-iterated that new, tighter stance on interest rates and the ‘taper’ of bond buying. His reasoning was that inflation is a problem that needs to be dealt with now, so the Fed will more quickly reduce their buying of bonds and moved ‘up’ the timeline for raising interest rates in 2022. On top of all of that, stocks had already generated strong gains for most investors in 2021, so the initial reaction was to ‘sell now and ask questions later.’ It certainly looked like the traditional ‘Santa Claus rally’ would not be making an appearance this year. (more…)