Weekly Market Recap

Published Mar. 06, 2022
Weekly Market Summary

WEEKLY MARKET SUMMARY

Dow Jones S&P 500 Nasdaq
33,614 (-0.76%)
4,328 (-0.58%)
13,313 (-1.90%)

Oil prices rise on concerns about energy supplies

After the SWIFT banking embargo sparked fears that energy supplies could be harmed inadvertently, oil prices rose Monday, although traded off earlier gains. The U.S. benchmark, West Texas Intermediate crude, increased by more than 3% to around $95 per barrel. Brent crude rose more than 2% to around $100 per barrel, the international standard. BP stated on Sunday that it will sell its 19.75 percent interest in Rosneft, a Russian-controlled oil business. Russia is a major supplier of oil and natural gas, particularly to Europe.

Target shares soar as retailer forecasts growth beyond pandemic

Target said Tuesday that it survived supply chain issues over the holidays and capitalized on e-commerce and customer gains during the Covid epidemic to finish out the year. Fourth-quarter adjusted earnings exceeded expectations, but revenue fell short. However, the stock soared as the company issued better-than-expected full-year projections on both the top and bottom lines, as well as strong operating margins.

Target announced on Monday that it will spend $300 million more on wages and health-care benefits in the coming year. Hourly employees’ starting compensation will range from $15 to $25 per hour, depending on their roles and local markets. Approximately 20% more employees will be eligible for medical coverage.

Ford will split EVs, legacy autos into separate units

Ford announced on Wednesday that it will restructure its operations to split its electric and internal combustion engine businesses into different divisions inside the company. Under CEO Jim Farley’s “Ford+” recovery plan, Ford is handling its Ford Pro commercial vehicle division in a similar manner.

Separating the businesses while keeping them in-house will satisfy some on Wall Street who have been urging legacy automakers to spin off their electric car operations in order to capitalize on the value that investors have been granting some EV start-ups. Ford’s stock jumped 4% in premarket trading as a result of the announcement.

Oil hits nearly 14-year highs; bond yields remain elevated

The American oil standard, West Texas Intermediate crude, climbed further on Thursday, reaching highs not seen since September 2008, above $116 per barrel, before retreating. Energy supply issues arose as a result of trade interruptions caused by Russian sanctions. The world’s three largest container shipping lines have all temporarily halted non-essential bookings to and from Russia, joining a growing list of businesses that are avoiding the Russian capital.

Investors sold bonds and rushed to stocks and other riskier assets on Thursday, a day after the 10-year Treasury yield hit its highest one-session high since March 2020 — the month the Covid pandemic began — as they sold bonds and flocked to stocks and other riskier assets. Bond prices rose on Tuesday as a result of the uncertainty surrounding Russia-Ukraine, while the 10-year yield fell below 1.7 percent.

After earnings, Best Buy jumps 9%, Snowflake tanks nearly 20%

On Thursday, Best Buy reported fourth-quarter revenue that fell short of projections but per-share earnings that were in line with predictions. Even though the consumer electronics store issued a weaker-than-expected estimate for fiscal 2022, the stock rose 9% in premarket trading. When the pandemic and stimulus cheques fuelled sales, Best Buy had a difficult year-over-year comparison.
Snowflake’s stock dropped over 20% in premarket trading on Thursday, the morning after the cloud software company forecasted slowed product revenue growth, which accounts for the majority of total sales. Snowflake’s revenue surged 101 percent year over year in its fiscal fourth quarter, beating expectations. However, this is the weakest increase in sales since at least 2019. Snowflake said on Wednesday that it had agreed to buy data startup Streamlit for $800 million.

February payrolls rose a surprisingly strong 678,000

According to the Labor Department, the US economy added 678,000 nonfarm employment in February. This was significantly higher than economists had projected. The unemployment rate fell to 3.8 percent, which was somewhat more than expected. Wages climbed 5.1 percent year over year last month, well below expectations, indicating that inflation may be moderating.

Before the Federal Reserve meets on March 15 and 16, the jobs report is the final monthly report. Multiple interest rate hikes are expected this year, beginning this month, according to the markets. When delivering his semiannual economic review on Capitol Hill on Wednesday, Fed Chairman Jerome Powell acknowledged as much to a House subcommittee.

Bond yields dip, U.S. oil prices rise on Russia-Ukraine conflict

Concerns about the increasing violence in Ukraine prompted investors to seek the perceived safety of bonds ahead of Friday’s jobs data. The 10-year Treasury yield, which moves in the opposite direction of price, has dropped to roughly 1.78 percent. The 10-year yield jumped the most in a single session since March 2020 on Wednesday.

Oil prices in the United States rose on Friday, although not as much as the previous day’s near 14-year high of over $116 per barrel. After a strong start to the day on Thursday, West Texas Intermediate crude fell sharply and ended the day in New York down more than 2.6 percent. However, on concerns over supply owing to Russian aggression, WTI stayed up a remarkable 17.5 percent for the week.

Gap shares rise after the retailer issues upbeat 2022 guidance

Gap stock rose 7% in premarket trading on Friday, the morning after the clothes retailer raised its profit prediction for 2022, despite growing prices and logistical hurdles. However, Gap expects prolonged challenges in the first quarter, mirroring American Eagle Outfitters, Abercrombie & Fitch, Urban Outfitters, and Victoria’s Secret. Gap’s fiscal fourth-quarter revenue was lower than expected due to the Covid epidemic, but it was still more than expected. Gap Inc., the parent company of Gap, Banana Republic, and Old Navy, reported a narrower-than-expected holiday-quarter loss.

Chevron to Buy Biofuel Company for $3.15 Billion

Chevron Corp. is buying a business that manufactures diesel and other fuels from corn or cooking oil for $3.15 billion, one of its largest investments in renewable fuels as the fossil-fuel behemoth confronts investor pressure to engage in green energy.

The purchase of Renewable Energy Group Inc., based in Iowa, will aid Chevron in its effort to offer a wider range of fuels with smaller carbon footprints than oil and natural gas. Renewable Energy Group Inc. has 11 refineries that originate primarily from waste products such as tallow or used cooking oil. Chevron intends to continue making purchases in the area, as well as invest in converting existing refineries to process low-carbon fuel sources, according to Chief Executive Mike Wirth.

Strong Hiring, Low Unemployment Point to Economy Making Post-Pandemic Pivot

The labor market in the United States is shifting toward a post-pandemic era, with a steady stream of people entering the workforce and employment levels nearing those seen before Covid-19’s fast spread.

According to the Labor Department, employers added 678,000 workers to their payrolls in February, the most in seven months. The unemployment rate fell to 3.8 percent from 4.0 percent a month before, approaching the 50-year low of 3.5 percent set just before the pandemic.

More than 300,000 people entered the workforce, and 1.8 million people reported being unable to work as a result of Covid-19. Wage growth slowed, indicating that a nationwide labor shortage may be lessening as employers fill long-unfilled lower-wage positions.

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