Market indexes accelerated into Monday’s close, finishing at session highs and ending the worst month of trading overall since the initial months of the Covid pandemic. A hawkish Fed combined with the rippling affects of the Omicron variant to inject a bearish sentiment into the whole of January trading. Climbing Treasury yields foretold a tighter financial market, adding proof to the pudding.
That’s not to say it was all a loss. Energy was able to post its strongest month in quite some time, +20%, on higher prices and greater demand. The U.S. housing market picked up steam in January, as higher interest rates in the future mean higher mortgage rates — home-buyers pulled forward their interest in obtaining residential real estate ahead of a spike in mortgage interest from multi-year historic lows.
The Dow grew 406 points in today’s session, +1.17%, while the Nasdaq was even stronger: +3.41%, or +469 points. The S&P 500 added gains of +1.89% on the day, and the much-beleaguered small-cap Russell 2000 was up +3.04% today. Throughout the course of January, the Dow was -4%, the S&P -5.86%, the Nasdaq -10% and the Russell -11%. A company like
Tesla
TSLA
illustrates the challenges of the past month: though it gained +10.7% today, it remained -11% from the start of 2022.
Late-month inflows to oversold stocks is the narrative we saw today and on Friday, especially on the Nasdaq. Specifically for today, a big payday for
Boeing
BA
helped that company lead the Dow on the day, +5%. As many as 102 planes, including options, has been reached with Qatar Air, for a list price of $34 billion.
Netflix
NFLX
and
Spotify
SPOT
were both up big on a notable upgrade at Citi, despite Spotify’s ongoing controversy surrounding Covid misinformation being broadcast by the service’s $100-million personality, Joe Rogan.
In short, it’s been the best two days of trading on the Nasdaq since November 2020. Its stable of irreplaceable tech companies like
Apple
AAPL
and
NVIDIA
NVDA
— up +2.6% and +7.2%, respectively — are finding buyers from very low price points. This is usually not the issue with regard to buying Apple or NVIDIA shares; in fact, quite the opposite.
Zacks Rank #2 (Buy)-rated semiconductor firm
Cirrus Logic
CRUS
is riding the crest +9% higher in late trading, on better-than-expected fiscal Q3 earnings and higher next-quarter revenue guidance: earnings of $2.54 per share notches an +18% positive earnings surprise, on $548.3 million in quarterly sales which outpaced the $511.1 million in the Zacks consensus. Revenue guidance for fiscal Q4 is now $400-440 million for Cirrus Logic, way up from the $345.3 million analysts had been expecting.
Along with a continuing Q4 earnings season, tomorrow brings us Manufacturing data from both PMI and ISM, job openings and quits for December, and a fresh read on Construction Spending last month. This promises to be an eventful week, with monthly jobs data following on Wednesday and Friday. Let’s be hopeful February is the bounce-back month that counters what we’ve experienced the past 4 1/2 weeks.
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