The Takeaway: Stocks closed higher to close the past week. A late Friday run before the market closed for the weekend left investors optimistic to open this week.
A promising earnings report from Apple ($AAPL) was in direct contrast to negative news, including an earnings miss from Netflix ($NFLX) and the Federal Reserve’s indication it will raise interest rates in March.
What’s Hot: Tech stocks saved the market last week. Big-time earnings events from bellwethers Apple ($AAPL) and Microsoft ($MSFT) led blue chip stocks. A 7% rally for Apple on Friday was helped along by the company reporting great results for all major product lines except for the iPad. Microsoft’s cloud computing business line has seen year-over-year growth with the pandemic and the shift to work from home for many professionals. Visa ($V) had a huge lift as the global payments company expressed optimism on crypto and its partnerships with dozens of cryptocurrency firms, including Coinbase ($COIN).
What’s Not: The numbers didn’t look good for Netflix ($NFLX) last week when it reported earnings. Investors who gave the stock a boost previously on the streamer raising customer rates likely hit the sell button as the streamer reported slowing growth. Despite blockbuster numbers in its recent earnings report, Tesla ($TSLA) saw a 9% drop on the week as CEO Elon Musk proclaimed robots a priority for the company in 2022. Finally, the shadow of higher interest rates forecasted by the Federal Reserve in March may mean the end of cheaper money. Bank of America is forecasting a whopping seven interest rate hikes for 2022.
What to Watch For:
- Big-time earnings reports from Alphabet ($GOOG) and Meta Platforms ($FB) could help the market ride a tech wave to positive territory like last week. Analysts are expecting good numbers for both companies, which compete in the online ad space.
- Analysts are expecting the recent semiconductor shortage to continue in the first half of 2022 as production ramps up. Legacy chipmakers with existing factories such as Texas Instruments ($TXN) are producing to capacity during the unprecedented supply crunch.
- Computer services firm MicroStrategy ($MSTR), the largest bitcoin-owning publicly-traded company, is hosting a corporate cryptocurrency event. Crypto luminaries such as Square’s Jack Dorsey ($SQ) will speak on bitcoin use cases.
- The price of oil rose to as high as $88.83 last week. An OPEC+ meeting is scheduled this week. The decision of the group on oil supplies may have impacts on the oil price as well as the stocks of energy firms like Exxon ($XOM) and Shell ($RDS.A).
- January’s U.S. jobs report will be available Thursday, which provides investors a look into how the economy is really doing. With the job market favoring candidates over companies, non-farm payrolls should be slightly up, which is positive for investors.
- The Winter Olympics begin in Beijing China at the end of the week. Organizers have set up strict pandemic-era rules for athletes and attendees. NBCUniversal, a division of Comcast ($CMCSA) which owns the broadcast rights, is keeping its announcers home.
Companies expected to boosting quarterly dividend payouts: Cigna Corporation ($CI) to $1.20 from $1.00, New York Times ($NYT) to $0.08 from $0.07, Trane Technologies ($TT) to $0.66 from $0.59, Intercontinental ($ICE) to $0.36 from $0.33 and Corning ($GLW) to $0.26 from $0.24.
Earnings This Week:
Monday (1/31) NXP Semiconductors ($NXPI), Cirrus Logic ($CRUS).
Tuesday (2/1) Exxon Mobil ($XOM), UPS ($UPS), Alphabet ($GOOG), General Motors ($GM), Starbucks ($SBUX), AMD ($AMD), PayPal Holdings ($PYPL), Match Group ($MTCH) and Electronic Arts ($EA).
Wednesday (2/2) Meta Platforms ($FB) T-Mobile US ($TMUS), Spotify ($SPOT), Facebook and Qualcomm ($QCOM).
Thursday (2/3) Shell plc ($RDS.A), Amazon ($AMZN), Ford Motor ($F), Pinterest ($PINS), Wynn Resorts ($WYNN), News Corp. ($NWSA), Unity Software ($U) and Activision Blizzard ($ATVI).
Friday (2/4) Bristol-Myers ($BMY) and Eaton ($ETN).