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Market Snapshot: The inventory market hasn't circled like that since 2018. Right here is the checklist for the final week of the yr.

What started as a lump of coal turned into a gift for bullish investors: a record for the S&P 500 index that ended the week before the Christmas holidays.

But once you understand this market, you are one of the few.

On Monday, the Wall Street scene may have felt to many investors similar to how ex-UFC champ Tyron Woodley's week last Saturday in his contest against prizewinner YouTube star Jake Paul:

In the case of Wall Street, the omicron variant of the coronavirus and a number of other worries, including the impending tightening of monetary policy by the Federal Reserve, struck Paul's devastating sixth round blow and leveled the Dow Jones Industrial Average
DJIA,
+ 0.55%,
the Nasdaq composite index
COMP,
+ 0.85%
and the S&P 500
SPX,
+ 0.62%
in a bruise session last Monday to start the shortened vacation week. The US markets were closed for Christmas on Friday.

Read: Dow crashes and Nasdaq nears correction as stock market investors see no Christmas cavalry to the rescue

However, some investors may feel the end of the week this way, with a spectacular serenity exhibited by a stock market that until recently seemed destined to be scaled back to size in the final weeks of 2021.

On Thursday, the S&P 500 index hit its 68th record high at year-end 2021, ending the week up 3.6%, while the Dow Jones Industrial Average rose 4.4% and the Nasdaq Composite a more ordinary rise of 0.7% after falling more than half towards the correction level at its lowest point during the volatile trading stretch.

Dow Jones data analysts observed that Monday's decline in the S&P 500 to a weekend record was also capped on July 19, when the index fell 1.9%, only to end the week at a record high.

More generally speaking, the volatility so far this December has been heartbreaking. It was the most restless since 2018, when the US Federal Reserve was last on the table to raise interest rates.

Dow Jones market data

And the so-called Santa Claus rally, a seasonally bullish phase in the last five trading sessions of a year and the first two in the new year, is still ahead. That is, if Santa Claus deigns to distribute any additional presents after the twinkle of the last three meetings.

The analysts of the Leuthold Group write that the Santa Claus rally has produced an average S&P 500 profit of 1.26% since 1972, which is "60 basis points below the average of the Santa Claus rallies from 1928 to 1972".

Ryan Detrick, LPL Financial's chief market strategist, confirmed that the market has had an overwhelming rally over this period, although it is not clear what the bullish uptrend is attributing other than Old St. Nick itself.

But we didn't come here to marvel at the Santa Claus rally, but the indefatigability of this market.

Nothing has changed in market dynamics other than investors' ability to fade negative headlines, including those focused on Omicron and the inflation outlook in the years to come. On Thursday, data showed that the 12-month rise in the US PCE index, the Federal Reserve's preferred inflation meter, rose from 5% in the previous month to 5.7% in November. That's the highest rate since 1982.

Wolf Richter of popular Wolf Street finance blog sounded as confused as many did in a recent column on Federal Reserve politics.

Inflation skyrockets even though this Fed is still pushing short-term rates near 0% and still printing money, albeit less than two months ago. And the Fed has finally pulled back on its ridiculous claims that this inflation, caused by huge historical money creations and interest rate cuts, is temporary and due to bottlenecks and supply chains.

via WolfStreet.com

The Fed announced in mid-December that it would be scaling back its bond purchases more quickly, and predictions from members of the central bank's policy setting panel of three rate hikes in 2022 would ease some of the upside in the market, but investors are looking at the restrictive policy the Fed continues to be cautious.

Rexnutting: The Fed's big surprise: All of these inflation pigeons have suddenly turned into hawks

Market extra: Why the Fed's restrictive measures to calm inflation are unlikely to cause a sudden outflow of liquidity from the markets

Are fears about the spread of the Omicron variant of the coronavirus, which causes the disease COVID-19, unfounded because vaccines and remedies can handle it? Are people just too tired to consider the effects of lockdowns and mobility problems? Has inflation peaked or is it already priced into stocks and bonds? Who knows?

Latest news: UK data supports the view that Omicron causes fewer hospital admissions, but also shows that boosters are wearing off

Jeremy Siegel, a renowned finance professor at the University of Pennsylvania's Wharton School of Business, told CNBC on Thursday that he envisions the Fed raising policy rates about eight times from their current range of 0% to 0.25% for benchmarks .

"Believe it or not, we have to get 2% of the Fed funds," speculated Siegel in an interview with the business news broadcaster. The Wharton professor still saw the possibility that stocks could post low double-digit gains even if the Fed had to become more aggressive.

"Stocks are still the place to be," said Siegel. He said he will bet on a rotation of value that will pay off in 2022 as investors position themselves for higher borrowing costs amid high-priced large-cap and growth-oriented investments.

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What's up in the New Year's week?

Monday

No US economic data expected.

Tuesday

S&P Case-Shiller US house price index for October at 9 a.m. ET

Wednesday

International merchandise trade, pre-registration for November at 8:30 p.m. ET

Outstanding property sales index for November at 10 a.m.

Thursday

Initial jobless claims for the week that ended December 25th at 8:30 AM.

Chicago PMI for December 9:45 a.m.

Friday

No government dates planned for New Years observation

US stock exchanges are open during regular hours

The US bond market closes at 2 p.m. ET

Read: Is the stock exchange open on Christmas Eve? New Year's Eve? Here are the upcoming holiday trading hours.

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