Dow closes lower after disappointing bank results

With Q4 beginning with less than stellar results from the first four of the big banks, taking profits became the sentiment of the day with the Dow plunging 201 points and the entire banking sector down 1.7 percent. Of course, as today’s expert put it in perspective, “The bar was very high going into results. On the surface it was good but under the hood, not so much.” Retail sales were also disappointing dropping almost 2% in December due to shortages (which appears contradictory given all the prior reports of robust holiday sales) and consumer sentiment dropped to its second lowest level in a decade triggering new doubts about the economic outlook not only for Q1 but for all of 2022.  Tech is all that benefitted today and that was all from bargain hunting considering the bath it took yesterday. Despite the bad news, the S&P Q4 forecast has now risen to 23.1% from yesterday’s 22.4%.  Contrariness abounds. Volume was a tad above average at 10.7 billion. 

Wall St closes down, Fed speakers put rate hikes in focus

It was a day of taking profits and the continued flight from tech to value as today Wells Fargo joined the fraternity of Goldman Sachs, JP Morgan and Deutsche Bank in forecasting that the Fed will hike rates not three but four times this year. With more hikes in the crystal ball, and the first coming as soon as March, tech stocks took a big hit as they are the most rate sensitive. Also stoking sentiment was today’s near and rare unanimity that now appears to exist amongst the Fed officials. Good news included a Q4 earnings forecast of 22.4% and a Producers Price Index annual growth of 9.7% vs a 9.8% forecast, or a 0.2% increase in December vs a 0.8% increased in November. Volume was in line with recent averages at 10.4 billion. 

Wall Street closes higher as inflation data supports Fed bets

The CPI surged 7% in the last 12 months, the most in four decades, and though this is a terrible number it was still quite in line with the forecast and thus not a surprise.  This was taken as a very big positive meaning the Fed will likely not be more aggressive than they’ve already stated and so all the indexes rose. Bond market yields also coming down signaled a slightly more risk-on environment so, once again, what ordinarily would be bad news became good news in this very unusual market. Q4 kicks off on Friday with three major banks due to report. Volume was just a tad below average at 10.2 billion. 

Wall Street closes higher after Powell testimony eases investors' concerns

The market continued to digest rate hike info with a continuing selloff which saw all the indexes drop in the morning, the Dow off some 400 points, and then Powell came out before the Congress and very much softened the Fed position calling the rate hikes and stimulus trimming a “second brake” on the economy, and this language alone was enough to ease anxieties and start another big buying of the dip, wiping out all the early losses and shooting the three indexes way into the black. CPI data is due on Wednesday which will paint a more vivid picture of the inflation issue and in which the forecast is a 5.4% increase.  Then on Friday, Q4 reporting starts which is likely to trigger a good deal more volatility.  Volume was right in line with the 4-week average at just under 10.6 billion. 

Nasdaq ekes out gain in late session comeback

Continuing to fret over inflation, concerns exacerbated today by Goldman Sachs predicting that there would be four rate hikes this year instead of the expected three, all the indexes took a dive, the Dow by nearly 400 points, before investors decided to start buying the dip.  Especially in tech, names that have seen drawdowns of 10% or more, as today’s expert put it, “people are looking at that and going that looks pretty good – time to snap them up.”  And snap them up they did taking the  Nasdaq and S&P from rather serious deficit positions to near break-even for the day, and the Dow to close down 162.  Volume was above average at 12.1 billion. 

COVID Deaths Per Million (July 2020-Present)

To close out the weekend I submit below this very instructive animated graphic showing the entire history of COVID deaths in the U.S. since July 2020 and by political afflilation.  I don't know how Florida and Arizona qualify as "slightly" Republican so I'm not sure that these identifiers can be trusted.  However, it should make everyone feel better that Michigan, despite being a national hotspot at least twice during the last two years, has always been near the bottom of the list in terms of deaths.  Hope everyone had a great weekend.  

Analysts' 9 Top Stock Picks for Q1

For this first market weekend of 2022 I thought I'd share this week's edition of U.S. News Invested in which their analysts select the nine best companies to buy during Q1. As always, they're all solid picks.  Enjoy the weekend.