Mon. January 31, 2022–DIA 351.08 +1.14%,QQQ 363.05 +3.20%,SPY 449.91 +1.80%,IWM 201.24 +3.07% CNN Fear/Greed 38 (Fear)
Chicago Purchasing Managers Index reported in stronger than expected 65.2 vs. 61.7. The Dallas Fed Manufacturing Index reported in far weaker than anticipated at 2 vs. 9.9. Equity markets gained in concert with a flattening of the US Treasury yield curve. The dollar index (DXY) 96.645 -.64% eased back from the prior week’s advance. During the day four fed officials appeared to moderate their views on monetary policy going forward, while walking back some of the prior statements by the Fed. All 11 S&P 500 economic sectors closed positive on the day. Consumer Discretionary (XLY) 184.95 +3.85% performed best followed by Technology Services (XLK) 161.97 +2.51%. Aircraft manufacturer Boeing (BA) 200.24 +5.07% led the DJIA after announcing a 30 Billion dollar deal with Qatar Airways. Salesforce.com (CRM) 232.63 +4.73% was the next best performer. The stock broke to the upside from a clear downtrend dating from the November 17, 2021 high just above 309. Entertainment and theme park company Walt Disney (DIS) 142.97 +3.13% outperformed as well. The shares of Disney appeared to rally back above prior support marking a potential failed breakdown. Oil and natural gas prices were strong on the day but most Energy Service (XLE) 65.92 +.44% stocks consolidated prior market outperformance. Ahead of the Beijing Olympics China based technology shares outperformed on the day. Pinduoduo (PDD) 59.84 +12.80% led the NDX100 index with Baidu (BIDU) 159.74 +9.02%, and JD.com (JD) 74.88 +7.99% outperforming as well. All three stocks have remained in well-defined downtrends.
Tue. February 1, 2022 – DIA 353.94 +.81%, QQQ 365.52 +.68%, SPY 452.95 +.68%, IWM 203.36 +1.05% CNN Fear/Greed Index 34 (Fear)
The Markit Manufacturing PMI (Jan) reported in higher than expected at 55.5 vs. 55. The ISM Manufacturing Employment Index (Jan) was reported higher than expected 54.5 vs. 53.8. The (leading indicator) ISM Manufacturing New Orders Index (Jan) disappointed coming in at 57.9 vs. 61. The (coincident indicator) ISM Manufacturing PMI (Jan) came in slightly higher than expected at 57.6 vs. 57.5. Importantly, the ISM Manufacturing Prices Paid Index (Jan) came in far higher than expected at 76.1 vs. 68.1. Energy Services (XLE) 68.27 +3.56% was the best performing S&P 500 sector followed by Basic Materials +1.54%. The top performer in the S&P 500 was United Parcel Service (UPS) 230.69 +14.08% beat earnings and revenue estimates and gave an upbeat outlook for 2022. Reacting to news reports of certain fertilizer products being in short supply, the second best performer in the S&P 500 was fertilizer and plant nutrition company Mosaic (MOS) 43.59 +9.11%. Mosaic will release earnings February 22 AMC. On the downside, AT&T (T) 24.42 -4.24% dropped as the firm stated that it would cut its dividend by close to half and spinoff of Warner Brothers Discovery.
Wed. February 2, 2022 –DIA 356.03 +.59%, QQQ 368.49 +.81%, SPY 457.35 +.97%, IWM 201.34 -.99% CNN Fear/Greed Index 36 (Fear)
The ADP Employment Change survey for January came with a contraction instead of the expected expansion -301K vs. +207K. The OPEC oil cartel agreed to a small increase in production in response to tightening market conditions. Interest rates declined as exhibited by the 10-Year Note (yield) Index (TNX) 17.66 -.34. The major indexes advanced on the day without small caps which ended lower on the day. Communication Services (XLC) 76.08 +2.00% lead the 11 S&P 500 sectors, followed by Real Estate (XLRE) 47.83 +1.72%. Consumer Discretionary (XLY) 184.96 -.60% was the clear underperformer. The traveler’s (TRV) 172.72 +2.82% led the DJIA followed by United Healthcare (UNH) 479.78 +2.43%. Alphabet (GOOGL) 2960 +7.52% moved higher on better than expected earnings and announced a 20 for 1 stock split. Also posting better than expected earnings and forward guidance, semiconductor firm Advanced Micro Devices (AMD) 122.76 +5.12% closed higher but well off the best levels of the day. On the downside, Payment processor PayPal (PYPL) 132.57 -24.59% plunged after posting lower earnings and higher expenses. The stock has been in a decline from July 26, 2021 high over $310. Also on the downside freight and logistics company C. H. Robinson (CHRW) 92.54 -11.50% fell on its financial report. Revenue increased but earnings lagged expectations due to higher expenses.
Thur. February 3, 2021 – DIA 350.98 -1.42%, QQQ 353.55 -4.05%, SPY 446.60 -2.35%, IWM 197.53 -1.89% CNN Fear/Greed Index 34 (Fear)
ISM Services PMI reported above expectations 59.9 vs. 59.5. The ISM Services Employment Index came in weaker at 52.3 vs. 55.7 expected. Initial Jobless Claims came slightly lower than expected at 238K vs. 245K. Non-Farm productivity came in stronger at +6.6% vs. 3.2%. Equity markets gapped lower after a dismal earnings report and outlook from Meta Platforms (FB) 237.76 -26.39% (parent company of Facebook). The plunge in the stock wiped $220 billion in market cap off the company’s valuation. Interest rates climbed as shown by the 10-Year Note (yield) Index 18.27 +.61 in response to rates rising in Europe. The worst performing sector in the S&P 500 was Communication Services (XLC) 70.99 -6.69% in response to the drop in Meta Platform shares. The next worst performing sector was Consumer Discretionary (XLY) 179.30 -3.06% as internet retailer Etsy (ETSY) 126.96 -8.03% hit a 52 week low. The shares of Etsy peaked above $307 on November 26 and have lost close to 60% of their valuation. Another lockdown pandemic thesis favorite, interactive exercise equipment retailer Peloton (PTON) 24.25 -9.18% came under continued selling pressure as well. The firm is scheduled to release earnings Tuesday February 8 AMC. PayPal (PYPL) 124.30 -6.24% continued its sell off from its earnings report. On the upside communications provider T-Mobile (TMUS) 120.78 +10.22% jumped higher on an earnings and revenue beat with good subscriber growth and positive outlook.
Fri. February 4, 2022 – DIA 350.77 -.06%, QQQ 358.01 +1.26%, SPY 448.57 +.44%, IWM 198.40 +.44% CNN Fear/Greed Index 34 (Fear)
Non-Farm Payrolls reported in at a larger increase than had been expected due to revisions +467K vs. the +150K expected. The Unemployment Rate for January came with a slight uptick to 4% from the anticipated 3.9%. The U6 Underemployment Rate dropped lower than expected coming in at 7.1% vs. 7.5%. Markets opened mixed and gathered steam throughout the session coming under some selling toward the close. Interest rates climbed as the 10-Year Note (yield) Index (TNX) 19.30 +1.03% climbed to a 2 year high. The lead sector on the day was Consumer Discretionary (XLY) 184.40 +2.84% as bellwether stock Amazon (AMZN) 3150.32 +13.54% bolted on its earnings release. There was some confusion on the release as the earnings took into account its stake in newly public Rivian Automotive (RIVN). Highlights were Amazon’s AWS division and a planned 17% price hike in Prime subscriptions. Cloud based data software developer Datadog (DDOG) 150.26 +8.87% moved higher ahead of earnings on February 10 BMO. On the downside, former pandemic favorite Clorox (CLX) 141.41 -14.47% reported weak earnings. The household and industrial cleaning products company sighted increased costs and lower margins and gave a poor outlook going forward.
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