January 14, 2022

Market recap

Dow Jones


-176.37 (-0.49%)

S&P 500


-67.29 (-1.42%)



-381.58 (-2.51%)



-$13.47 (-4.23%)



-$56.87 (-2.01%)



-$3.34 (-1.90%)


Top Story

Markets Weighed Down By Tech Weakness

•   US stocks fell Thursday. The move lower was driven by large technology companies which underperformed on the second-to-last day of the week. Growth-oriented companies, which often tend to be in the technology space, come under pressure when rates rise.

•   Given rising inflation and a hawkish Federal Reserve, many investors expect benchmarks like the US 10-year Treasury yield to move closer to 2% in the coming months. If this happens and debt costs become more expensive, future cash flows of high-flying companies will be eroded, making them less attractive investments.

•   Wall Street didn't love what it saw on the economic data front Thursday. Another inflation report showed that the December producer price index rose 9.7% year over year, the highest record since 2010. Meanwhile, initial jobless claims came in at 230,000 for the week ending January 8. This was higher than economists' original projections of 200,000, further souring sentiment on the Street.

What to Be on the Lookout for Today

•   December retail sales following the holiday shopping period will be released. For a quick preview, Mastercard’s (MA) in-store and online sale data tracking suggests retail closed out 2021 on a high note.

•   Later in the morning, the Fed will announce industrial production for December. The Import Price Index and business inventories will also hit the market, as will the University of Michigan’s preliminary Consumer Sentiment Index for January.

•   Earnings season is in focus as well with a host of reports from big banks. JPMorgan Chase (JPM) will host a conference call to outline its Q4 and full-year earnings. Analysts increased their earnings estimates for the company last week, with J. Mitchell upping expectations from $14.90 per share to $15.04 for the year. Wells Fargo (WFC), Citigroup (C), First Republic Bank (FRC), and BlackRock (BLK) also report.

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A Few Headlines That Should Be on Your Radar

Companies outside the tech space are exploring the metaverse and how it could benefit their business.
While tech giants like Microsoft (MSFT) and Meta (FB) pace the metaverse conversation, a number of other industries see potential in the digital realm. Areas primed for exploration include practical scientific applications as well as ways to improve workplace culture and customer engagement.

Private equity firm TPG (TPG) went public yesterday, which the investment community views as an important test for the IPO market in 2022.
Private equity firms posted big gains in 2021, but analysts say the “cheap” money fueling that growth is going away amid rising interest rates. Relatedly, companies that recently went public saw their stock prices fall toward the end of last year as inflation further spooked investors.

Digital ordering and fintech continue to drive private investment, with pioneering technologies also on the rise.
FlipDish is now a unicorn following its latest fundraising announcement as digital ordering continues to grow during the pandemic. Meanwhile, online French fintech Qonto and MycoWorks announced new rounds of funding, highlighting investor excitement over financial services and biomaterials, respectively.

How risky is day trading? Generally, there are far more day trading risks than with traditional buy-and-hold strategies.
Day trading requires a higher level of sophistication; it has different cost implications, potentially substantial tax outcomes, and involves a greater degree of risk exposure — especially if you trade on margin (which involves borrowing funds to place bigger bets).

Not-So-Breaking News

Financial Planner Tip of the Day

“Figure out engaging ways to learn about personal finances.”

Brian Walsh, CFP® at SoFi

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