Monday,
February 28, 2022
Market recap
Dow Jones
34,058.75
+834.92 (+2.51%)
S&P 500
4,384.65
+95.95 (+2.24%)
Nasdaq
13,694.62
+221.04 (+1.64%)
Top Story
Wall Street Still Watching Ukraine
• US stocks were mixed last week, given the events in Ukraine. The Dow Jones Industrial Average hit its lowest level of the year so far on Wednesday. Major averages rebounded on Thursday despite escalating tensions and then finished Friday in the green. Many countries, including the United States, imposed fresh sanctions on Russia. As a new week begins, investors are still following closely to see how the situation evolves.
• On the economic front, the core personal consumption expenditures price index jumped 5.2% from the same time last year. This is the Federal Reserve’s primary inflation gauge and economists had been expecting a 5.1% increase. Experts warn protracted geopolitical tensions could put more upward pressure on inflation.
What to Be on the Lookout for Today
• The Chicago Purchasing Manager Index for February is due. This measures the performance of the manufacturing and non-manufacturing sector in the greater Chicago area. January’s index came in at 65.2, which was up from 64.3 in December. January’s index beat expectations and was the highest recorded in three months. Also, the US Department of Commerce will release its advance report on January’s trade in goods.
• Zoom (ZM) will share its most recent quarterly results. Since its peak during the pandemic, the stock has fallen by around 75%. Analysts argue that this is a result of investors pivoting away from “work at home” companies. Still, Zoom beat expectations on the top and bottom lines when it last posted earnings in late November.
Investing With the Business Cycle
A “business cycle” refers to the periodic expansion and contraction of a nation’s economy. Also known as an “economic cycle,” it tracks the different stages of growth and decline in a country’s gross domestic product, or economic activity.
No business cycle is identical, but history shows there can be a rough pattern to which industries do better as the economy expands and contracts. Investors often take cues from the current stage of the economic business cycle to determine which sectors to invest in next. Learn how to prepare and invest for different business cycle stages.
A Few Headlines That Should Be on Your Radar
The week ahead on Wall Street will provide investors with a fresh look at construction spending and the job market. Data set to be released this week will include January’s construction spending, which jumped 9% in December year-over-year. Wall Street will be watching several indicators from the labor market, as they could shed further light on the impact of the Omicron variant. Read more >> US consumers lost a whopping $5.8 billion dollars to fraud last year, which is 70% higher than losses recorded in 2020. The FTC says 2021 saw the highest number of fraud claims filed in 20 years. On average, victims lost $500, but that number doubled for imposter schemes where con artists pretended to be family members or romantic interests. Consumers can follow a number of simple steps to stay protected. Read more >> The average cost to ship a 40-foot box from China to the US west coast is likely to hit a record high at this week’s conference in Long Beach. Consumers may want to brace for even higher prices. Data shows around a quarter of all shipping containers are importing goods for large retailers like Walmart (WMT), Ikea, and Amazon (AMZN). Clothing, appliances, and cars are all exposed to price increases as freight costs rise. Analysts argue because the shipping industry is highly consolidated with few major players, they have little incentive to cut the fees charged to importers. Read more >> Heightened volatility is part of investing sometimes. Understanding the causes can help you be a more prepared investor. Here’s a closer look at what volatility exactly is, what causes volatility in stocks, and how to respond. Read more >>Not-So-Breaking News
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Sportswear and shoe retailer Foot Locker (FL) issued downbeat sales guidance for 2022. The company says it expects to sell fewer Nike (NKE) products as the sneaker giant looks to sell directly to customers through its own sites and apps. Foot Locker also noted consumers had extra stimulus money to spend last year that they won’t have this year.
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Beyond Meat (BYND) reported a wider-than-expected loss during its fourth quarter and provided a revenue forecast for 2022 that fell short of analyst predictions. Executives say the company is focused on moderating the growth of its operating expenses as the year progresses.
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Movie theater owner Cinemark Holdings (CNK) exceeded Wall Street estimates by posting $666.6 million in revenue and narrower-than-expected losses during its most recent quarter. During its earnings call with analysts the company noted that as of December 31, 2021, all of its locations have reopened following COVID-19 closures.
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Dell (DELL) posted a mixed earnings report last week, falling short of expectations for profit, but beating on revenue. The computer company cited ongoing challenges tied into component shortages. Its board also announced stockholders will begin receiving quarterly dividends of 33 cents per share, starting April 29.
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Digital payment company Block (SQ) beat analyst expectations for revenue and delivered upbeat guidance for the rest of the year. Led by Twitter (TWTR) founder Jack Dorsey, Block predicts increased profits each quarter of 2022 for both Cash App and Square.
Financial Planner Tip of the Day
“What your goals are will largely determine whether or not long-term investing is the right choice for you. So you might want to spend time outlining what you want to achieve — which may depend on your life stage — and how much money you’ll need to achieve it.”
Brian Walsh, CFP® at SoFi