Tuesday,
February 22, 2022
Market recap
Dow Jones
34,079.12
-232.91 (-0.68%)
S&P 500
4,348.88
-31.38 (-0.72%)
Nasdaq
13,548.07
-168.65 (-1.23%)
Top Story
Geopolitical Jitters Still Unnerving Investors
• US stocks fell Friday once again, dragged down by uncertainty regarding the situation unfolding between Russia and Ukraine. On Thursday Kiev said pro-Russian separatists attacked a village near the border. Tensions between the two countries have injected fresh volatility into markets as Wall Street watches the posturing play out.
• Existing home sales increased 6.7% in January from a month earlier, the highest rate in a year. With that said, the National Association of REALTORS® (NAR) noted that the number of sales was actually down 2.3% from January 2021. The monthly jump did exceed analyst expectations of a 1.3% rise.
What to Be on the Lookout for Today
• The Consumer Confidence Index for February is due. This aims to measure how comfortable consumers are regarding their financial outlook. The number declined last month. January’s index came in at 113.8, down from 115.2 in December.
• Housing market data is also on the way, in the form of December’s S&P Case-Shiller home price index, and December’s FHFA home price index. Information provider IHS Markit will also release its manufacturing PMI for February, and its services PMI for February.
• Home Depot (HD) reports earnings for its most recent quarter. During Q3 2021 the home improvement company beat analyst expectations on the top and bottom lines. Same-store sales came in at 6.1%, well above the estimated 2.2% increase. Customers also spent 12.9% more per trip on average.
The Week Ahead at SoFi
Join us and explore the challenges and nuances of fostering inclusion and diversity in a post-COVID, hybrid-working world. Plus catch this week’s Your Next Dollar. Save your virtual seat!
A Few Headlines That Should Be on Your Radar
The week ahead on Wall Street will provide the market with a fresh look at inflation data as well as housing market indicators. Later this week the Fed’s preferred inflation gauge is due, as investors continue to try and predict how the central bank will respond to rising prices. Also watch for new home sales, as the housing market is especially tight and prices are surging. Some of the week’s earnings reports could shed light on how the waning pandemic is impacting certain aspects of consumer spending. Read more >> Prices are rising across the entire economy, and the cost for a used car is skyrocketing. That’s good for auto parts revenue, and the industry’s largest companies are reporting robust sales growth. Motorists are more willing to hold on to older vehicles while facing higher prices for used cars and limited supplies of new cars. This means a greater need for replacement parts and equipment. The short term outlook is good as people could start spending more time on the road. Now the sector’s biggest names could look to cut prices and push out smaller competitors. Read more >> While 2021 saw movie theater ticket sales bounce back in a big way, there’s no denying the pandemic could lead to big changes for the business model. COVID-19 lockdowns led to movie theaters’ worst earning year in four decades, but things have started to recover. Still, movie theater companies are looking at ways to diversify, and movie studios are making adjustments to their strategies. Read more >> CryptoPunks have taken the NFT space and the art world by storm. Find out why this pixel art is so popular and how it all got started. In June of 2021, a cryptopunk NFT (non-fungible token) called “Covid Alien” sold for an astounding $11.7 million. This NFT was part of a rare collection of only nine cryptopunks dubbed “alien punks,” and is the only one depicted as wearing a mask. Read more >>Not-So-Breaking News
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DuPont (DD) has announced plans to sell the bulk of its materials and mobility division to Celanese Corp (CE) for $11 billion. Market observers say this is part of DuPont’s shift in strategy towards high-margin operations including water solutions and electronics.
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Streaming platform Roku (ROKU) reported a slowdown in revenue growth and missed industry expectations for earnings last week. The company is reportedly ramping up spending as it looks to develop original content. Analysts argue this will shrink Roku’s profit margins.
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French car maker Renault (RNLSY) says the ongoing chip shortage resulted in 500,000 fewer cars being made last year. Executives predict chips will become more freely available and that the situation should approach “normal” in the second half of the year.
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Speaking of chips, Intel (INTC) issued downbeat guidance for profits while forecasting big jumps in revenue for 2026. This is based on investments made into the development of new foundries and chip-making factories, which will squeeze margins for now.
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DraftKings (DKNG) posted a mixed earnings report last week, beating analyst expectations for earnings, but issuing weaker than expected guidance for 2022. While the company predicts revenues will rise, expansion costs are expected to cause wider-than-expected losses on the bottom line.
Financial Planner Tip of the Day
“If you have savings that is not currently earmarked for a specific financial goal, take some time to think about what goal you’d like to apply it to. A great first saving goal is to have three to six months of living expenses in an emergency fund. After that, it might be good to turn your attention toward retirement savings and investing.”
Brian Walsh, CFP® at SoFi