Mon. January 24, 2022 – DIA 343.81 +.43%, QQQ 353.30 +.46%, SPY 439.84 +.42%, IWM 201.53 +2.30% CNN Fear/Greed Index 41 (Fear)
The Markit Manufacturing PMI for January (Prel.) reported in weaker than expected at 55 vs. 56.7. The Markit Services PMI was also much weaker at 50.9 vs. 55 expected. The major indexes gapped lower on interest rate fears, and drove lower by mid-day in what appeared to be a washout low, before rallying strongly into the close of the session. At the lows the DJIA was down -1115 points but closed positive by +99 points. Consumer Discretionary (XLY) 182.59 +1.20% performed best of the 11 S&P 500 economic sectors, buoyed by a bidding war for retailer Kohl’s (KSS) 63.71 +36.02%. The buyout offers had a knock on effect with other retailers, Macy’s (M) 27.02 +18.00%, and Dillard’s (DDS) 265.32 +14.73% Home improvement retailer The Home Depot (HD) 363.81 +4.21% led the DJIA. Former pandemic darling interactive exercise equipment maker Peloton (PTON) 29.71 +9.79% performed best in the NDX 100, but failed to break above its downtrend. The stock popped on a report that an activist investor pressed for the CEO to resign. Travel services firm Airbnb (ABNB) 147.90 -5.63% was the worst performer in the NDX 100. The stock was as high as $218 last February 11, 2021.
Tue. January 25, 2022 – DIA 342.96 -.25%, QQQ 345.11 -2.32%, SPY 434.47 -1.22%, IWM 198.84 -1.33% CNN Fear/Greed Index 37 (Fear)
The S&P/Case Shiller Home Price Index for Nov. (YoY) came in stronger than expected at +18.3% vs. 18%. Markets opened lower from the previous day and demonstrated similar volatility. The major indexes traded inside the range of Monday’s session, with most closing well off the highs of the day. The best performing was the DJIA which closed with slight losses after being down 600 points. Energy Services (XLE) 65.31 +3.88% showed continued strength as WTI crude oil 85.23 +$1.92 advanced, with Apache (APA) 32.85 +8.28%, Occidental (OXY) 36.77 +8.12%, Halliburton (HAL) 30.5930.59 +7.00%, Marathon (MRO) 19.50 +6.56% all outperforming. China based technology firms moved up on the day, NetEase (NTES) 98.62% +3.49% and Baidu (BIDU) 150.97 +1.29% and JD.com (JD) 72.15 +.57%. The stocks have been in a long decline as a result of US regulatory pressure concerning financial reporting and accounting rule issues. In a reversal of Monday’s advance Peloton (PTON) 26.53 -10.70% moved lower. Also to the downside utility power producer NextEra Energy (NEE) 75.10 -8.33%. The firm released earnings and severely disappointed on the revenue line. Also on the call the company announced changes in management. The shares were recently as high as 93 on December 31st.
Wed. January 26, 2022 – DIA 341.46 -.44%, QQQ 344.57 -.16%, SPY 433.38 -.25%, IWM 195.97 -1.44% CNN Fear/Greed Index 36 (Fear)
FOMC Decision Day
New Home Sales for December were reported stronger than expected 811K vs. 760K. The Federal Open Market Committee came with its statement at 2pm which was followed by Fed Chair Jerome Powell’s Q&A. In the statement the Fed signaled it was prepared to raise rates at the next meeting in March. Powell also stated that inflation was stronger than he had previously believed and that the Fed had room to tighten /raise rates significantly. The major indexes were all positive going into the statement but quickly sold off on the Powell presser. Markets rallied once the press conference ended. The 10-Year Note (yield) Index settled at 18.48 +.65% as the bond market sold off. The two best performing sectors on the day were Technology Services (XLK) 152.43 +.59% and Financial Services (XLF) 38.57 +.26%. Microsoft (MSFT) 296.71 +2.85% and Visa (V) 205.87 +1.92% both led the DJIA. Gorilla glass and optical communications equipment provider Corning (GLW) 39.24 +11.16% topped the S&P 500 performance as the company beat on both earnings and revenue. On the downside streaming content provider Discovery Networks (DISCA) 24.40 -9.16% continued its sell off upon recent reports by Netflix (NFLX) and Disney (DIS) of slowing subscriber growth. Also on the downside, staffing & employment services provider Automatic Data Processing (ADP) 197.46 -8.95% continued its recent sell off after reporting disappointing earnings and revenue. The stock has corrected 20% since peaking on December 29.
Thurs. January 28, 2022 – DIA 341.55 +.03%, QQQ 341.10 -1.01%, SPY 431.24 -.49%, IWM 191.52 -2.27% CNN Fear/Greed Index 33 (Fear)
Durable Goods Orders were reported much weaker than expected -.9% vs. -.5%, but GDP came at a much better annualized rate than had been expected +6.9% vs. 5.5%. Interest rates declined as exhibited by the 10-Year Note (yield) Index 18.07 -.41. The dollar index (DXY) closed at 97.227 +.837 reversing the previous day’s weakness. Equity markets opened lower after overnight selling pressure post FOMC decision day. Small caps were weakest. The Energy Service sector (XLE) 65.91 +1.09% continued to outperform. Consumer Discretionary (XLY) 174.30 -2.42% was the clear laggard. Electric vehicle manufacturers were demonstrably for sale with Lucid Group (LCID) 28.70 -14.10% and Tesla (TSLA) 829.10 -11.55% moving lower on an earnings beat by Tesla which also warned of supply chain problems. Semiconductor shares were notably weak. Intel (INTC) 48.05 -7.04 reported a beat on earnings but gave a poor outlook going forward. Advanced Micro Devices (AMD) 102.60 -7.33% and Microchip (MCHP) 71.04 -4.50% moved down in sympathy. Semi-equipment manufactures Lam Research (LRCX) 555.30-6.93% and KLA Corporation (KLAC) 361.80 -4.94% were notably weak as well. Showing leadership on the day, applications software firm Servicenow (NOW) 528.69 +9.14% beat on both revenue and earnings. The day’s big disappointment was semiconductor test equipment maker Teradyne (TER) 111.24 -22.41% which beat on earnings while giving a poor outlook.
Fri. January 29, 2022 – DIA 347.11 +1.63%, QQQ 351.80 +3.14%, SPY 441.88 +2.47%, IWM 195.18+1.91% CNN Fear/Greed Index 36 (Fear)
Personal Consumption Expenditures Price Index for December (MoM) was reported as expected at .5%. On a Year over Year basis (YoY) Personal Consumption Expenditures Price Index was reported at 4.9% above the 4.8% expected. The Michigan Consumer Sentiment Index was reported lower than expectations at 67.2 vs. 68.7%. Equity markets opened lower on the day but rallied into mid-day to be positive, retraced some of the move then clear buying lifted the indexes to close near the highs in a very strong move. Technology Services (XLK)158.00 +4.37% was the strongest sector in the S&P 500 with Apple Computer (AAPL) 170.33 +6.98% advancing on a stellar earnings report that demonstrated the company’s ability to handle supply chain issues. Leading the NDX100 office workflow and team management software applications provider Atlassian Corporation (TEAM) 319.17 +9.72% reported a beat on both earnings and revenue, while giving a favorable outlook. Diabetes continuous monitoring device manufacturer DEXCOM (DXCM) 413.39 +7.79% was the 2nd best performer in the NDX100. The stock continues to be in a clear downtrend since peaking at 659.46 on November 18 2021. Another prior leader mRNA vaccine maker Moderna (MRNA) 159.47 +7.30% moved higher. The shares that are still in a downtrend traded at 497 back on August 10, 2021. In what appeared to be a sell the news reaction Western Digital (WDC) 49.90 -7.32% moved lower after beating earnings.
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