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US Stock Markets Ended April 14, 2022
The S&P 500 Index declined for a second straight week as the market offered sparse optimism to investors with inflation still climbing and Q2 earnings reports that have been mixed. The March CPI YoY figure of 8.5% exceeded expectations as inflation continues to rise to levels not seen since the early 1980s. Producers were spared no harm as the PPI Final Demand YoY Index also touched a new high of 11.2%. Materials was the best performing sector in the S&P 500 during the week while Information Technology lagged. The yield on the ten-year treasury bill climbed to 2.83%, over 100bps higher than a year ago, which was a headwind for growth stocks during the week. Oil spiked over $10/barrel over three days as peace talks between Russia and Ukraine stalled, helping Energy stocks beat the market this week. J.P. Morgan (JPM, -5.52%) kicked off the 2Q22 earnings season with quarterly profit that was 42% lower than a year ago. The largest bank in the U.S. cited an increase in reserves to account for heightened risks and reduced investment banking activity as the reasons for the pullback in earnings. Wells Fargo, Goldman Sachs, and Citigroup all similarly reported disappointing earnings as the pandemic boom of frenetic trading, a hot IPO market, and a season of highly profitable mortgage lending have normalized. Airlines got a boost due to upbeat earnings from Delta Airlines (DAL, 15.3%) which foreshadowed a return to profitability in the following quarter. Twitter (TWTR, -2.49%) was likely the most attention-grabbing story of the week as activist billionaire Elon Musk, who disclosed last week that he acquired nearly 10% of the company, declined a position on Twitter's board of directors and made an offer to buy out the rest of the company at a $40B valuation. Twitter shares closed Friday at a 20% discount to Musk's offering price as it's still uncertain whether the offer will be accepted by a majority of shareholders. Earnings to watch in the coming week include Financials companies Bank of America and Charles Schwab as well as Communication Services companies Netflix, AT&T, and Verizon.
Monday, April 18, 2022 @ 9:35 AM
These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.