Stocks continued falling this week as well, as investors worried that risks surrounding Russia's war on Ukraine may be spinning out of control, and oil prices skyrocketed after the White House said it was considering a ban on imports of Russian crude. Commodities of all kinds continued to push higher on fears of supply crunches, with crude oil soaring past $130 per barrel to trade near its highest since 2008. Gold price also rose and reached $2,000 at some point. The dollar rose to levels not seen since 2020, and 10-year Treasury yields slumped 12 basis points to 1.7% as investors sought safe havens. the Dow Jones and S&P 500 each closed down 1.3% for the week, and the tech-heavy Nasdaq Composite tumbled 2.8%. The drop came even as the Labor Department said the U.S. added 678,000 jobs in February, well ahead of economists' expectations for 400,000 jobs.
Top news last week:
- Russia blocks Facebook: Russia is blocking Meta Platforms Inc's Facebook (FB), the country's communications regulator said on Friday, in response to what it said were restrictions of access to Russian media on the platform. The move is a major escalation in an ongoing confrontation between big tech companies and Russia, which has in recent years issued a slew of fines and hobbled services through slowdowns. Meta's head of global affairs Nick Clegg said the company would continue to do everything it could to restore its services. Meta in a blog said it was working to keep its services available "to the greatest extent possible" but it had stopped showing ads to users in Russia and barred Russian advertisers from running ads anywhere in the world "due to the difficulties of operating in Russia at this time." Meta had about 7.5 million users on Facebook in Russia as of last year and 122.2 million users across its other services, including Instagram, WhatsApp and Messenger, according to estimates from Insider Intelligence. The Russian state communications regulator, Roskomnadzor, later said it had also restricted access to Twitter.
- Ford split: Ford Motor said Wednesday it will reorganize operations to separate its electric and internal combustion engine businesses into different units within the automaker. The company expects the move will streamline its growing electric vehicle business and maximize profits. Ford also upped its expected investment in EVs and other technologies to $50 billion by 2026, up from a previously announced $30 billion through 2025. It plans to spend $5 billion on EVs this year, double its 2021 total. Ford CEO Jim Farley said the new EV business will “produce as much excitement as any pure EV competitor, but with scale and resources that no start-up could ever match.” He described the legacy business as “a profit and cash engine” for the company. The EV business will be called “Ford Model e.” The traditional operations will be “Ford Blue.” The company said they will “operate as distinct businesses but share relevant technology and best practices to leverage scale and drive operating improvements.” While announcing the new businesses, Farley said Ford plans to produce more than 2 million electric vehicles by 2026.
- Retailers Posts Strong Earnings: The wave of retailers posted strong fourth-quarter earnings and robust outlooks for fiscal 2022. Kroger posted 14.6% higher sales than the fourth quarter of 2019 and offered a positive outlook for more growth in 2022. "Kroger remains the No. 1 retailer in many exciting areas, such as specialty cheese, sushi, and floral," CEO Rodney McMullen said during the earnings call. "As the world's largest florist, we sold over 76 million floral stems for Valentine's Day alone." Investors seem enthusiastic about Kroger, as stock has surged more than 25% last week. Target (TGT) also demonstrated that it can grow under challenging circumstances. It increased profitability when costs were rising and the supply chain was dragging down other retailers. Target’s sales increased 9% year over year in the fiscal fourth quarter and full-year revenue crossed $100 billion for the first time. TGT stock rose almost 12% during the week. Best Buy was another Retailer, that saw its stock surge more than 10% after earnings call last week. Despite the fact that company sales fell short of expectations, investors were encouraged by managements strong outlook for the next two years.
Top S&P 500 sectors last week:
- Energy sector + 9.25% (ETF: XLE)
- Utilities sector + 4.77% (ETF: XLU)
- Real Estate sector + 1.71% (ETF: XLRE)
Earnings:
Tuesday, March 8: Dick's Sporting Goods (DKS), MongoDB (MDB), Petco Health and Wellness (WOOF), Bumble Inc (BMBL), Casey's General Stores (CASY), Stitch Fix (SFIX).
Wednesday, March 9: Asana Inc (ASAN), United Natural Foods (UNFI), REV GRoup (REVG) and Crowdstrike (CRWD).
Thursday, March 10: JD.com (JD), Oracle (ORCL), Docusign (DOCU) and Rivian Automotive (RIVN).
