The Market News Reel for this week! Get the most important market news & updates for the week ahead each Monday!
Major headlines, excerpts from news sources and a link to the full article are shown below. "Breaking Thoughts" section is purely our opinion.
Stocks Surge In Rebound After Volatile Week
"U.S. equities rebounded from Friday’s selloff as investors took comfort in reports that cases of the omicron variant have been relatively mild.
The S&P 500 rose 1.2%, erasing last week’s losses, while the technology-heavy Nasdaq 100 gained 0.8%.
The mood across markets was calmer on Monday as investors pointed to good news from South Africa that showed hospitals haven’t been overwhelmed by the latest wave of Covid cases. However, the Cboe volatility index remains elevated.
Later this week, attention will turn to U.S. consumer price index, which is expected to show the largest annual advance in decades, giving the Federal Reserve more leeway to deliver swifter policy tightening in its more hawkish tilt." - read more on Bloomberg here
Breaking Thoughts: As we discussed in last week's post the new variant seemed to be quite mild and markets (along with some governments) were likely overreacting to the news of its spread.
Overall much has been made about the weak performance of stocks in recent weeks. We have seen alot of negativity in financial media and across social media, with many pointing out that beyond the largest companies most stocks have fallen significantly (especially high multiple software companies that were popular earlier this year). Despite the recent turbulence its important to have perspective.
Here is the Performance of the S&P500 Over the Last Month:
Looks pretty rough... but if we zoom out to the "Year to Date" (YTD) performance we see a very different picture, with almost every area experiencing high growth.
Here is the YTD Performance of the S&P500:
Many stocks are up 20% to 65% this year and with the exception of telecom, payments, and media virtually every industry is seeing strength this year. Remember that over the last century the broad stock market typically only returned about 7% per year, so this year is still somewhat of an outlier.
The sell off in some extremely high multiple (over 50 times sales) stocks, along with the ongoing China trade issues, inflation and the pandemic are all headwinds. But selloffs are healthy for the stock market and the big picture for returns this year and for both earnings & the economy in the coming year is still solid.
Major Earnings This Week
Monday December 6:
GitLab (GTLB): Expected Q3 earnings of $-0.48 per share
Sumo Logic (SUMO): Expected Q3 earnings of $-0.14 per share
Tuesday December 7:
AutoZone (AZO): Expected Q1 earnings of $20.77 per share
SentinelOne (S): Expected Q3 earnings of $-0.18 per share
Toll Brothers (TOL): Expected Q4 earnings of $2.49 per share
Wednesday December 8:
Cambell Soup (CPB): Expected Q1 earnings of $0.81 per share
Gamestop (GME): Expected Q3 earnings of $-0.52 per share
RH (RH): Expected Q3 earnings of $6.63 per share
Thursday December 9:
Broadcom (AVGO): Expected Q4 earnings of $7.74 per share
Chewy (CHWY): Expected Q3 earnings of $-0.04 per share
Costco (COST): Expected Q1 earnings of $2.62 per share
LuluLemon (LULU): Expected Q3 earnings of $1.41 per share
Oracle (ORCL): Expected Q2 earnings of $1.11 per share
Major IPOs Expected This Week
Thursday December 9:
Nu Holdings (NU), Brazilian fintech giant seeks to raise $2.8B at a $41B valuation
See you next week!
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