The big swoosh reported yesterday. Earnings results topped estimates largely due to N. American demand. However, lingering concerns around inflation, the war overseas, and supply chains prevented the company from providing an outlook for the upcoming year.
The central bank raised interest rates by 25 basis points, with this hike coming in-line with expectations. A hawkish Fed expects more rate hikes in 2022 and 2023. The U.S. central bank projected the equivalent of quarter-percentage-point rate increases at each of its six remaining policy meetings this year.
Commodities markets continue to dominate the discussion this week, as a result of Russia invading Ukraine. There’s a lot of potential for LNG stocks. More LNG is anticipated to go to Europe as customers continue to turn away from Russian gas. We have already begun the trend of US exports of LNG to Europe topping Russian pipeline volumes.
Investors continue to monitor the events of the war in Ukraine. What will be the impact on Global markets and energy prices? OPEC meets on Wednesday to decide the fate of production boosts. This week we will get earnings from big names like HP, Lucid Group, Target, and Costco.
Russia and Ukraine continue their dramatic dance and the stock market is likely to experience continued volatility this week. The oil market remains in the spotlight as developments continue to play out.
This week investors will continue to focus on two key issues: (1) interest rates and (2) the crisis in the Ukraine.
Investors are still dealing with the sting of last week’s shock employment rate. This week we receive news on consumer price inflation that has the potential to rattle the markets if it is believed to reset the FOMC rate hike plan.
The S&P 500 Index is down 8% from its all-time high and is off 7% for the month of January.
We just experienced the worst weekly loss since March of 2020. Be prepared for deeper correction in 2022. There’s more volatility on the way with the Nasdaq down more than 15% from its high.
Moving into the third week of the year, earnings for S&P 500 companies are forecast to be up more than 20% this quarter. Treasury yields are being watched closely as the 10-year Treasury yield is at 1.79%.