Market indexes opened lower led by weakness in tech stocks for the fourth week in a row and bond yields climbed as investors prepared for faster than anticipated rise in interest rates. Earnings season is expected to pick up momentum this week with large banks and airlines scheduled to report. Crude oil prices fell in New York and international markets on China demand worries.
MSFT BAC WFC AAL DAL
MSFT BAC WFC AAL DAL
Tech stocks led the decliners for the third week in a row and U.S. indexes closed mixed. Nasdaq Composite fell 1.3% on Friday capping the weekly loss of 3.9% while the S&P 500 fell 0.3% and 1.3% respectively. Chipmakers led the weakness with persistent supply chain worries and growing threat of a recession. For the year, tech heavy Nasdaq and the S&P 500 are down 13.4% and 6.4% respectively.
TSLA AAPL NVDA MU GOOG
TSLA AAPL NVDA MU GOOG
Transportation stocks fell again on the rising supply chain disruptions linked to China and Europe and surging inflation in the U.S. The tight lockdowns in China, the rerouting of energy supplies in Europe, and the elevated inflation are trimming the freight demand volume in the U.S. UPS fell for the 8th day in a row and for the year the industry index is down 12%.
UPS FDX UNP CP CHRW
UPS FDX UNP CP CHRW
WD-40 soared after the lubricant maker reported stronger earnings. PriceSmart advanced in active volume after the warehouse club chain said comparable store sales increased 10.3%. EPAM Systems said it has terminated its operations in Russia and plans to spend as much as $100 million in assisting Ukrainian employees in relocating. Kroger and Target gained on broker recommendations.
PSMT EPAM KR TGT WDFC
PSMT EPAM KR TGT WDFC
U.S. indexes are inching higher after a volatile week as investors digest the change of inflation stance by the Federal Reserve. For the week so far, Nasdaq Composite is down 2.6% and S&P 500 has fallen 1%. Investors continue to pour money into commodities ETFs. 10-year U.S. Treasury bonds are yielding near 2.69%, a steady rise from 1.63% at the start of the year.
NEM BHP XOM CVX
NEM BHP XOM CVX
The U.S. Senate in a unanimous vote approved to drop the most favored nation status of Russia and Belarus and ban oil and coal imports. The measure was also approved by the House The import ban against alcohol, diamonds, and seafood adds up to about $1 billion. Natural resources including silver, palladium, rhodium, plywood, and semi-finished steel will face higher import taxes replacing tariffs.
Judge Ketanji Brown Jackson was confirmed after a contentious battle by the U.S. Senate 53-47 vote as the Supreme Court Justice as the first black woman to serve on the bench. The 116th Justice Jackson will fill Stephen Breyer's seat at the end of this summer and diversify the bench but is unlikely to tilt the conservative ideology dominating the court.
HP Inc surged 15% after Warren Buffett controlled Berkshire Hathaway disclosed 11% stake in the company. System1 extended its week-long advance after the release of fourth-quarter earnings and better than expected outlook. Sprinklr, the customer experience software developer, reported higher than expected revenues and next quarter and annual revenues.
HPQ
HPQ
Broad market indexes turned negative in early trading but small cap index edged up slightly higher as investors digested Fed officials' discussion about rate outlook and a plan to sell U.S. bonds. Crude oil edged higher to just below $97 and international oil hovered near $102 a barrel. Utilities and consumer products companies were in favor as investors looked for safe haven stocks.
KHC PM GIS
KHC PM GIS
U.S. stock indexes in steady decline touched the lows just ahead of the release of the monetary policy meeting minutes. Indexes trimmed losses after the release of the Fed's plan to shrink a bloated portfolio of U.S. bonds but the Nasdaq Composite led the losers with more than 2% loss. Pre-earnings rally was on hold as the dollar advanced to a 11-month high and the U.S. 10-year yield rose to 2.6%.
MSFT AMZN CRM DHI DG
MSFT AMZN CRM DHI DG
Stocks of Spirit Airlines, Frontier Group, and JetBlue turned lower after the unsolicited bid raised uncertainty for at least few months. Rivian gained 1.6% after the EV maker said it is on track to meet its production goal of 25,000 units in the year. Simply Good Foods gained 4% after the healthier snack maker lifted sales outlook. Intel fell 1% after it suspended its operations in Russia.
U.S. stock futures are pointing to another loss of at least 1% at the opening as bond yields continue to march upwards. 10-year U.S. bond is trading at 2.65% ahead of the release of minutes of meetings this afternoon. Tech stocks are leading the losers and energy stocks are in focus ahead of the Congressional hearing today. Oil inched higher to $103.30 a barrel after dipping in Tuesday.
XOM CVX HES
XOM CVX HES
U.S. indexes fell 1% and Nasdaq Composite dropped 2.2% after a dovish Fed Governor said that the central bank needed an aggressive approach in tackling inflation. 10-year U.S. bond closed at 2.55%, a 3-year high, and 5-year at 2.70%. Inflation worries drove the market sentiment and tech stocks took the hit. The 30-year mortgage rate crossed 5% for the first time since 2011 and two days in 2018.
AAPL MSFT AMZN DHI TOL
AAPL MSFT AMZN DHI TOL
MarketAxess Holdings dropped 9% after the fixed income trading platform reported its total credit monthly average daily volume fell 3% from a year ago. The combined daily U.S. high grade and high yield volume fell 6% but total credit trading volume in the month increased to $894.6 billion, second best monthly record.
MKTX
MKTX
Carvana plunged 9% after an RBC Capital analyst downgraded the stocks and highlighted that the company is expanding at a faster pace than the sales growth. The online auto retailer is expected to sell about 550,000 vehicles in 2022 against the expanded capacity of 3.3 million. Moreover, the recent Adesa car auction service may face integration risks.
CVNA
CVNA