Monday 02/21/22 – Markets Closed for Presidents Day
Tuesday 02/22/22 – DIA 336.01 -1.46%, QQQ 338.08 -1.00%, SPY 429.57 -1.07%, IWM 196.66 -1.41% CNN Fear/Greed Index 33 (Fear)
The Case-Shiller Home Price Index came in higher than expected at +18.6% vs. +18.2% on a year over year basis. The preliminary Markit Services PMI for February came in higher at 56.7 vs. 53 expected. Markets gapped lower overnight as Russia made an incursion into two separatist provinces in Ukraine. In response Germany blocked the certification of the Nord Stream 2 pipeline. Ukraine president Zelensky signaled that the Russian move was an annexation similar to Crimea. Markets tested the session lows ahead of the Biden news conference to address the U.S. response to the attack. The best performing S&P 500 sector was Healthcare Services (XLV) 127.19 -.25%. The clear laggard for the day was Consumer Discretionary (XLY) 174.75 -2.92%, as Home Depot (HD) 316.17 -8.85% which beat on earnings and revenue while raising the dividend – but still sank on a weak outlook going forward. Best Buy (BBY) 90.55 -7.33% fell to a 52-week low ahead of the March 3 earnings webcast (amc). Chinese technology shares were weak the day after the close of the Beijing Olympics and, amid the possibility of an incursion by China into Taiwan, NetEase (NTES) 91.37 -7.26% and Baidu (BIDU) 151.67 -3.84% both fell. On the upside, and demonstrating a continued shift to low-beta dividend paying stocks, Kraft Heinz (KHC) 40.40 +5.04% continued its post earnings rally.
Wednesday 02/23/22 – DIA 331.52 -1.34%, QQQ 329.42 -2.56%, SPY 421.95 -1.77%, IWM 192.98 -1.87% CNN Fear/Greed Index 26 (Fear)
No high impact economic data were released on the day. Equity markets gapped lower on unconfirmed reports that Russia had initiated cyber-attacks against Ukrainian governmental and corporate infrastructure. During the day, the most recent support levels were taken out on the major indexes. Energy Services (XLE) 67.64 +1.03% was the only S&P 500 economic sector to close positive, with Chevron (CVX) 135.55 +2.38% the top contributor to the DJIA. Healthcare (XLV) 126.55 -.50% was the second best performing sector. Consumer Discretionary (XLY) 168.91 -3.34% performed the worst, followed by Technology (XLK) 147.25 -2.50%. Cisco Systems (CSCO) 54.44 -3.30% clearly was the laggard in the DJIA followed by Microsoft 280.27 -2.59%. Bucking the negative technology trend, Cadence Design Systems (CDNS) 140.88 +4.19% led the NDX100 after beating earnings and revenues, and upping guidance. On the downside, internet travel accommodation firm Airbnb (ABNB) 150.04 -9.20% fared worst in that index as travel stocks were hit hard on the Ukraine news. Other travel & entertainment stocks that were hit hard included Carnival Cruise Lines 20.21 -6.04%, United Air Lines (UAL) 43.85 -5.33%, and Norwegian Cruise Lines (NCLH) 19.29 -5.26%. In M&A news, auto parts designer and manufacturer Tenneco (TEN) 19.35 +93.89% agreed to be taken private by Apollo Global Management for 7.1 billion dollars.
Thursday 2/24/22 – DIA 332.34 +.25%, QQQ 340.49 +3.36%, SPY 428.30 +1.50%, IWM 198.04 +2.62% CNN Fear/Greed Index 27 (Fear) with a low on the day of 20 (Extreme Fear)
Gross Domestic Product came in as expected at +7%. GDP Price index came in higher +7.2% vs. 6.9% expected. Initial Jobless claims came very close to expected at 232K. There were two Fed speakers on the day, Harker and Mester. World markets continued to be focused on the Russian incursion into neighboring Ukraine. The Russian military increased the territorial reach beyond the initial land grab. Equity markets gapped lower in a trapdoor fashion taking out support levels, with the S&P 500 finding a low near 4114. The condition of the market was extremely oversold in the morning after several down days and the gap down. The CNN Fear/Greed index hit an extreme low value of 20 before a short covering rally ensued in the indexes. By the end of the day, all the major indexes had closed positive with the NDX100 up big from the lows. Technology (XLK) 152.28 +3.42% performed best on the day for the 11 S&P 500 economic sectors, followed by Communication Services (XLC) 67.44 +2.80%. Salesforce.com (CRM) 204.29 +7.22% led the DJIA, followed by Microsoft (MSFT) 294.59 +5.11%. Vaccine maker Moderna (MRNA) 156.23 +15.10% led the NDX100 after beating on revenue and earnings expectations and giving a positive forward outlook. On the downside, as the risk-on trade advanced in higher beta names in technology and communications, lower beta names saw profit taking. The worst performing S&P 500 sector was Consumer Staples (XLP) 73.54 -1.72% with prepared food distributors Kraft Heinz (KHC) 38.98 -2.79%, Mondelez (MDLZ) 63.99 -2.46% and Pepsi (PEP) 163.79 -1.74% all down in response to the rotation to risk-on beta.
Friday 2/25/2022 – DIA 340.54 +2.47%, QQQ 345.77 +1.55%, SPY 437.75 +2.21%, IWM 202.50 +2.25% CNN Fear/Greed 31 (Fear)
Durable Goods Orders for January came in better than expected at +1.6% vs. .8%. Durables Ex-Defense were much better than expected +1.6% vs. +.1%. Durables Ex-Transportation were better as well +.7% vs. .4% expected. Non-defense Capital Goods Orders Ex-Aircraft came in +.9% vs. +.5% expected. Equity markets continued the rally from the oversold condition. Reports of Moscow’s willingness to meet with Ukrainian officials in Minsk helped lift stocks throughout the day. Basic Materials (XLB) 84.34 +3.65% led the eleven S&P 500 economic sectors, with specialty steel manufacturer Nucor (NUE) 130.05 +7.57% hitting a new 52-week high, while Technology (XLK) 154.35 +1.36% was the clear laggard. Former pandemic favorite, arts & crafts internet marketplace Etsy, Inc. (ETSY) 148.94 +16.21% reported a beat on earnings and revenues while reporting increasing users. Payment processor Block, Inc (SQ) 119.82 +26.14 also beat earnings and revenue estimates handily. On the downside critical event and threat assessment software provider Everbridge (EVBG) 30.61 -33.87% reported a Q4 loss but did manage to beat on revenue expectations. The stock has been a decline from the September 7th most recent high of 167.40. In M&A news internet auto retailer CARVANA (CVNA) 152.52 +26.52% agreed to acquire the U.S. based internet auction business of KAR Auction Services (KAR) 18.94 +38.35%.
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