Weekly Market Recap

Published Feb. 25, 2022
Weekly Market Summary


Dow Jones S&P 500 Nasdaq
34,058 (-0.73%)
4,384 (0.00%)
13,694 (-0.30%)

Wall Street set to sink after Russia’s invasion of Ukraine

Russia started its invasion of Ukraine in the early morning hours of Thursday, sending global markets into a tailspin. The Dow and S&P 500 futures both fell more than 2%. Nasdaq futures are down nearly 3%. Losses of this magnitude at the open would place the Nasdaq in a bear market, which is characterized as a 20% or greater drop from recent highs.

The Dow Jones Industrial Average joined the S&P 500 and the Nasdaq in correction zone on Wednesday. The Dow and Nasdaq have now lost five sessions in a row. The S&P 500’s losing skid has now reached four sessions. Bond prices rose and rates fell on Thursday as investors sought the perceived safety of bonds. The 10-year Treasury yield dropped to 1.89 percent.

Macy’s jumped, Home Depot slumped after issuing quarterly results

Macy’s stock jumped about 6% in premarket trading after the department store company posted fiscal fourth-quarter earnings and sales that beat expectations. Macy’s also said that a strategic assessment has pushed the store to speed up its turnaround plans, despite activist Jana Partners’ demands that it divide its e-commerce operations.
The Dow Jones Industrial Average Despite generating better-than-expected earnings and revenue for its fiscal fourth quarter on Tuesday, Home Depot’s stock dropped 2% in premarket trade. In the following fiscal year, Home Depot anticipates profits per share growth in the low single digits and sales growth that is “slightly positive.”

Tesla CEO Elon Musk accuses SEC of leaking information from federal probe

Elon Musk, the CEO of Tesla, has accused the Securities and Exchange Commission of leaking information about a federal probe in retaliation for his public criticism of the federal financial regulator, according to his counsel. Musk’s appeal to a federal judge came four days after he claimed the SEC was harassing him by continuing to investigate him. Musk and the SEC first clashed in September 2018, when the agency charged Musk with making “false and misleading” claims to investors over a tweet claiming that the firm had secured money for a take-private deal.

Lowe’s shares jump on better-than-expected earnings, forward guidance

As Americans buy, fix up, and renovate their houses in a tight real estate market, Lowe’s topped quarterly earnings and revenue estimates on Wednesday, raising its full-year outlook for each. In premarket trading, the company’s stock surged 3% as the home improvement store stated its momentum had continued into February. Lowe’s quarterly same-store sales in the United States climbed by 5.1 percent, which was better than projected. For the year, the company expects same-store sales to fluctuate between a 1% decline and a 1% growth, versus a 0.7 percent increase.

Weekly mortgage applications drop to lowest level in more than 2 years

Mortgage rates are rising, which is affecting both first-time homeowners and those looking to refinance. According to the Mortgage Bankers Association, total mortgage applications fell 13.1% last week, reaching their lowest level since December 2019. Last week, Refis lost 15% of its value. Home prices have been continuously rising since Covid, and they haven’t slowed down this year. In 2021, the S&P CoreLogic Case-Shiller Home Price Index increased 18.8% nationally, compared to 10.4% in 2020.

Oil prices surge above $100 per barrel for first time since 2014

Crude oil prices in the United States and throughout the world both hit new highs on Thursday, surpassing $100 per barrel for the first time since 2014. In premarket trade, shares of American energy majors such as Chevron and Exxon Mobil were among the winners. The cause for the increase in energy prices is as follows: Russia is a major global producer of oil and natural gas, and the price of both increased by 6% on Thursday.
Any long-term increase in energy prices might exacerbate the United States’ surging inflation and hinder the Federal Reserve’s plans to raise interest rates numerous times this year. On the one hand, central bankers must balance the risk of even larger price pressures — which could justify more aggressive hikes — with the risk of a negative impact on the economy and markets, which could justify a more gradual tightening.

Gold jumps to over one-year highs; bitcoin drops to one-month lows

Gold prices jumped more than 3% to more than $1,970 per ounce on Thursday, the most in over a year. In times of geopolitical crisis, gold, like bonds, is considered as a safe haven. Bitcoin, which is regarded as a store of value similar to gold in crypto circles, fell about 7% on Thursday to a one-month low of over $35,100.
The world’s largest digital currency has recently been trading more like a tech stock, falling over 50% from all-time highs of around $69,000 in early November. According to CoinMarketCap data, the whole crypto market has lost more than $150 billion in the last 24 hours.

Alibaba Posts Slowest Revenue Growth Since Going Public

Alibaba Group Holding Ltd. reported its slowest quarterly revenue growth since going public in 2014, and said it would focus on maintaining users rather than seeking user increase, signaling a strategy pivot for the Chinese e-commerce behemoth.
Alibaba’s sales climbed 10% year over year in the October-December quarter, reaching 242.58 billion yuan ($38.07 billion) as of Dec. 31, missing analyst expectations.
Alibaba, which was rapidly growing and dominating China’s e-commerce business until recently, has faced a number of obstacles in the past year. Competitive rivals, declining growth in the world’s second-largest economy, and Beijing’s regulatory crackdown were among them. Alibaba was slammed with a record antimonopoly fine in China in April for allegedly abusing its dominating market position, according to regulators.
Chief Executive Daniel Zhang said the company would now take a step back from its prior ambition of rapid user expansion during a Thursday results call.

Coinbase Profit Surges During Bitcoin’s Wild Rally and Selloff

Coinbase Global Inc.’s fourth-quarter revenue more than quadrupled as the largest cryptocurrency exchange in the United States benefited from a wild quarter that saw bitcoin hit new highs before plummeting.

Coinbase reported net income of $840 million, or $3.32 per diluted share, on net revenue of $2.5 billion in the fourth quarter, up from $177 million on net revenue of $497 million a year ago, according to the firm.

According to FactSet, analysts expected earnings of $1.94 per share on revenue of $1.97 billion. Coinbase’s stock was down 3.7 percent in after-hours trading, selling at $172.86.

The company earned $3.62 billion in net income on $7.36 billion in net revenue in 2021, up from $322 million in net income on $1.14 billion in net revenue in 2020.

For cryptocurrencies, the fourth quarter was unusually tumultuous. By November, the price of bitcoin had risen 58 percent from $43,800 to a new high of $68,991, bringing the total value of the crypto market to a new high of $3 trillion. However, bitcoin dropped 33% from there, completing the quarter at $46,208.

U.S. Consumer Spending Rose 2.1% in January and Inflation Accelerated Amid Omicron Wave

Consumer spending in the United States increased rapidly in January, while prices increased even faster, adding to other signals that the economy is off to a strong start despite the Omicron wave of Covid-19 infections. However, experts have cautioned that the situation in Ukraine could slow GDP in the coming months if higher gasoline costs result.

The Commerce Department announced Friday that consumer spending increased a seasonally adjusted 2.1 percent in January from the previous month, reversing a revised 0.8 percent loss in December. Following the end of the federal government’s monthly child tax benefit, personal income remained steady for the month.

The personal-consumption-expenditures price index, the department’s measure of inflation, climbed to 6.1 percent in January from a year earlier, the fastest rate in four decades.

Consumer expenditure increased by 1.5 percent after inflation in January, but family income after taxes decreased by 0.5 percent.

According to recent economic figures, the US economy gained traction last month, with businesses adding 467,000 jobs and retail sales climbing a seasonally adjusted 3.8 percent from December.

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