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Thursday, September 22, 2022
Today's newsletter is by Jared Blikre, a reporter focused on the markets on Yahoo Finance. Follow him on Twitter @SPYJared.
Stocks are finally listening to Jay Powell and the Federal Reserve.
In a highly anticipated move Wednesday, the Federal Reserve hiked its benchmark interest rate by 0.75 percentage points after raising it a similar amount at its prior two meetings. Powell & Co. also delivered a hawkish surprise by lifting expectations for further hikes this year and the next to an eventual terminal rate of 4.6%.
The Dow, Nasdaq Composite and the S&P 500 all finished the day down about 1.75%. That's in stark contrast to the rally after the prior July meeting, which was arguably quite hawkish, as well.
What has changed since July? In August, Powell said at the Fed's annual meeting in Jackson Hole, Wyoming that the central bank would raise interest rates until the "job is done" bringing down inflation.
Powell's uncharacteristically short and direct Jackson Hole message seems to be the deciding factor for markets. He doubled down on Wednesday.
"My main message has not changed since Jackson Hole," Powell said at a press conference on Wednesday. "The FOMC is resolved to bring inflation down and we will keep at it until the job is done." Stocks be damned.
Looking ahead to the two meetings remaining in 2022, markets are adjusting to the likelihood of a fourth 0.75% in October and 0.50% in December.
Former Fed Governor Larry Meyer is taking it a step further, forecasting a 0.50% hike in February and 0.25% in March to complete the cycle. This lands the Fed's terminal rate at 5.00% to 5.25% — a full 2.00 percentage points above the rate set Wednesday.
Powell and his colleagues might have slept soundly last night knowing Wall Street got the message that interest rates will keep rising — even if investors didn't necessarily like what they're hearing.
8:30 a.m. ET: Current Account Balance, Q2 (-$260.8 billion expected, -$291.4 billion during prior quarter)
8:30 a.m. ET: Initial jobless claims, week ended September 17 (218,000 expected, 213,000 during prior week)
8:30 a.m. ET: Continuing claims, week ended September 10 (1.400 expected, 1.403 during prior week)
10:00 a.m. ET: Leading Index, August (-0.1% expected, -0.14% during prior month)
11:00 a.m. ET: Kansas City Fed. Manufacturing Activity, September (5 expected, 3 during prior month)
Costco (COST), Darden Restaurants (DRI), FactSet (FDS), FedEx (FDX)
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Tesla (NASDAQ: TSLA) shareholders had a rough day Friday with the stock dropping 7.5%. Last week's plunge dropped Tesla to about 50% of its early January high, and some investors may have decided that was the time to buy. Tesla has already reported that it produced almost 366,000 vehicles in the third quarter, including a record 83,135 from its newly upgraded plant in Shanghai, China.
Growth stocks including MercadoLibre (NASDAQ: MELI), Etsy (NASDAQ: ETSY), and Wayfair (NYSE: W) were flying higher Monday morning as investors reacted to new fiscal policy announcements out of the U.K. and a strong earnings report from Bank of America. Investors were also looking forward to third-quarter earnings reports, which ramp up this week.
Shares of Meta Platforms (NASDAQ: META) are rising today, up by 4.9% as of 11:41 a.m. ET. The gains came despite a report from The Wall Street Journal that claimed Meta is falling short of internal company projections for user growth in its metaverse platform, Horizon Worlds. Meta's share price does look a bit oversold after falling 60% year to date.
Shares of Roblox (NYSE: RBLX) soared on Monday after the popular video game development company reported encouraging growth metrics for September. As of 1:35 p.m. ET, Roblox's stock price was up more than 22%. Roblox's daily active users (DAUs) jumped 23% year over year to 57.8 million.
Back then, the electric vehicle company was in some serious trouble. Canoo warned investors earlier in 2022 "that there is substantial doubt about the company's ability to continue as a going concern." Canoo has also struggled to meet its production target for 2022.
Not many hedge managers have ignited as much controversy as Cathie Wood. The founder of Ark Invest has built her brand on running against the crowd. From her early embrace of tech stocks to her outspoken political conservatism, Cathie Wood has always been something of a lightning rod. Wood is staking her reputation and fortune on a belief that new technologies, and especially the way that new technologies will interact with each other, are going to completely transform our world. In her view, se
To get a sense of who is truly in control of QUALCOMM Incorporated ( NASDAQ:QCOM ), it is important to understand the…
Down 67% year to date, Carnival Corporation (NYSE: CCL) has probably landed on some value investors' radar. Like most cruise companies, Carnival was hurt by the COVID-19 pandemic, especially after the U.S. Centers for Disease Control's (CDC) no-sail order scuttled its operations for much of 2020. As of the third quarter, Carnival reports $28.5 billion in long-term debt — up from just $9.7 billion at the end of 2019.
Think price levels will be back to normal soon? Think again.
The 86-year-old investing legend has spoken. You may want to pay attention.
Mawer Investment Management, an investment management firm, published its third-quarter 2022 investor letter – a copy of which can be downloaded here. In its third-quarter letter, the fund mentioned that the valuation correction experienced in 2022 has its benefits in that gravity is being restored to the system and that the probability of a global […]
Shares of enterprise software companies Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) bounced back strong today, up 9.1%, 7%, and 7.2%, respectively, as of 1:35 p.m. ET. Overall, the macroeconomic picture seemed to improve slightly today, as the United Kingdom's new government announced it would be reversing its prior tax cut plan, which caused chaos in the currency and government bond markets. Long-term U.S. bond yields also retreated slightly, perhaps helping sentiment for high-growth software stocks.
Ken Laudan of Buffalo Funds believes Wall Street analysts are wrong about 2023, but that an earnings decline for the S&P 500 will set up a rebound for stocks.
Today's Research Daily features the Q3 earnings season scorecard and new research reports on Apple (AAPL), Abbott (ABT) and IBM (IBM) and others.
Chances are good you're ahead of 25% of your peers.
Applied Materials, KLA, Lam Research and ASML Holding are included in this Analyst Blog.
The tech-heavy Nasdaq was leading the charge, with electric vehicle (EV) growth stocks like Rivian Automotive (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID) rising as much as 6% and 8.7%, respectively. EV start-up Canoo (NASDAQ: GOEV) was an even bigger gainer. As of 10:50 a.m. ET, Rivian was still higher by 5.9%, Lucid by 6.8%, and Canoo by 18%.
Paying attention to big price swings is useful mostly to determine those opportunistic times to "buy low." The four stocks are AbbVie (NYSE: ABBV), Amazon (NASDAQ: AMZN), Texas Instruments (NASDAQ: TXN), and Intuitive Surgical (NASDAQ: ISRG). Boring old pharmaceutical giant AbbVie is the largest holding in my portfolio.
Two analysts weighed in with buy ratings for the software giant ahead of the next quarterly earnings report.
In this article, we will look at the 14 best mid-cap stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Mid-Cap Stocks To Buy Now. Mid-cap stocks may be thought of as the “sweet spot” between the rampant volatility of small-caps and the stability […]