The large-cap indexes suffered their second consecutive week of declines as worries over a Russian invasion of Ukraine and high inflation weighed on sentiment. A steep decline in Meta Platforms (Facebook) weighed heavily on the communication services sector. The typically defensive consumer staples sector outperformed within the S&P 500 Index, helped by gains in Walmart and Procter & Gamble.
Conflicting signals on whether Russian troops were preparing to cross the border with Ukraine appeared to whipsaw markets throughout the week. Stocks fell on Monday afternoon following a CNN report that the president of Ukraine, Volodymyr Zelensky, said the government had been informed that the coming Wednesday would “be the day of attack.” The indexes then rallied on Tuesday, after Russian President Vladimir Putin said he hoped for a diplomatic solution to tensions with the U.S. and its allies and announced a partial pullback of troops near the Ukrainian border. Stocks then reversed course and headed lower again on Thursday, after U.S. officials stated that there was no evidence of a pullback and that an invasion was “imminent.”
During the week The S&P 500 index fell 1.6%, Dow jones industrial average declined 1.9% and the tech heavy Nasdaq composite indexed closed down 1.76%.
Top news last week:
- Top Money manager buys in Q4 2021: On Feb. 15, institutional investment managers with more than $100 million AUM had to disclose their positions at the end of Q4 2021. Where are the big guys investing their money? According to seeking alpha top 20 hedge funds in US invested in the following stocks the most in Q4 of last year: Alphabet (GOOG), Amazon (AMZN), Visa (V), Shopify (SHOP), Nu Holdings (NU), Microsoft (MSFT), Snowflake (SNOW), Tesla (TSLA), MercadoLibre (MELI), Smartsheet (SMAR) and Carvana (CVNA). This list is particularly relevant today because all of these stocks are trading lower today than they did at the end of 2021 (with the exception of Visa, marginally higher). Hedge funds are prohibitively expensive for the masses. But their top holdings and recent buys are for everyone to see four times a year, with only a few weeks' delay. By multiplying your sources and taking inspiration from some of the best and most respected money managers in the world, you can build an outstanding portfolio for yourself, without the need to sacrifice 20% of your own alpha in performance fees, let alone 2% of your precious savings given away in the form of management fees.
- Companies that benefited from pandemic are seeing slower growth: Is the COVID pandemic finally coming to an end? It sure looks like it, based on latest guidance from Shopify (SHOP). After posting 86% revenue growth in 2020 and a 57% surge last year, the e-commerce software provider said its pace of growth won't be as strong in 2022. Shares of Shopify slid 16% on Wednesday following the cautious update from the company, which dragged down related online retail stocks like Etsy (ETSY), eBay (EBAY), Wayfair (W) and Chewy (CHWY). Other pandemic favorites, like Roblox (RBLX), tumbled 26% for its worst day ever, as kids dialed back online activity and spent more time out of the house. Netflix, which represented the Covid streaming boom, is down 43%.
- Gold prices rise to highest levels in one year: Gold has made a positive start to the year, outperforming bonds and equities as scared investors are looking for safe places to park cash. The metal, used by investors as a store of value in times of stress, has climbed more than 5 per cent this month and broken above $1,900 a troy ounce on Friday before easing back to $1,888. SPDR Gold Trust ETF (GLD) is up 5.22% year to date. The crisis in Ukraine has provided the impetus for the advance, although analysts reckon gold is also benefiting from concerns that US growth could slow as the Federal Reserve is forced to act aggressively to get inflation under control. “The potential for a [inflation-induced] monetary policy error and elevated recession risks are providing support,” said Citigroup analyst Aakash Doshi, who thinks gold could hit $1,950 over the next three months.
Earnings:
Tuesday, February 22: Home Depot (HD), Macy's (M), Medtronic (MDT), Caesars Entertainment (CZR), Palo Alto Networks (PANW), Teladoc (TDOC) and Mercadolibre Inc (MELI).
Wednesday, February 23: Lowe's (LOW), TJX Companies (TJX), eBay (EBAY), Hertz Global (HTZ), BioCryst Pharmaceuticals, Inc.(BCRX), Overstock.com (OSTK), fuboTV (FUBO), Skillz (SKLZ) and Lemonade (LMND).
Thursday, February 24: Alibaba Group (BABA), Moderna (NASDAQ:MRNA), Li Auto (LI), Nikola (NKLA), Dell (DELL), Block (SQ), Autodesk (ADSK), VMware (VMW), Coinbase Global (COIN), Beyond Meat (BYND) and Rocket Companies (RKT).
Friday, February 25: Foot Locker (FL), Cinemark Holdings (CNK) and Lendingtree Inc. (TREE).
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