Monday 2/28/2022 –DIA 339.34 -.35%, QQQ 346.80 +.30%, SPY 436.63 -.26%, IWM 203.32 +.40% CNN Fear/Greed 24 (Extreme Fear)
The Chicago Purchasing Managers Index for February came in much weaker than expected but still indicating expansion at 56.3 vs. 63 anticipated. Equity markets opened lower on continued Russia Ukraine war developments. Reports that Russia had put its nuclear forces on high alert added to the initial bearish tone on the open. Energy Services (XLE) 70.58 +2.47% outperformed on the continued threat of supply disruptions to Europe and especially Germany. Chevron (CVX) 144.00 +2.58% led the DJIA while hitting an all-time high. SolarEdge Technologies (SEDG) 319.14 +14.98 led the S&P 500 followed by Occidental Petroleum (OXY) 43.73 +12.88%. Real Estate (XLRE) -1.72% was the laggard group, followed by Financials (XLF) 38.52 -1.48%. Defense stocks outperformed as the Russia/Ukraine conflict intensified and Germany announced an increase in defense spending. Northrup Grumman (NOC) 442.14 +7.9%, Lockheed Martin (LMT) 433.9 +8.4% and Raytheon (RTX) 102.70 +4.67% all broke out to new all-time highs. International banks were under pressure as news of European and US financial sanctions were enacted to exclude certain Russian banks from the SWIFT payment system. JPMorgan (JPM) 141.80 -4.17% was the clear laggard in the DJIA followed by Goldman Sachs (GS) 341.29 -2.52%. High-end electric vehicle manufacturer Lucid Group (LCID) 28.98 +9.98% led the NDX ahead of its earnings release after market close (amc). In M&A activity, biodiesel fuel producer Renewable Energy Group (REGI) 61.50 +40.38% agreed to be acquired by Chevron in a 3.15 billion dollar deal.
Tuesday 3/1/2022 – DIA 333.16 -1.82%, QQQ 341.49 -1.53%, SPY 429.98 -1.52%, IWM 199.49 -1.88% CNN Fear/Greed 19 (Extreme Fear)
The ISM Manufacturing PMI for February came at 58.6 vs. 58 expected. The ISM Manufacturing Employment Index for February was weaker than expected at 52.9 vs. 54.4.The ISM Manufacturing New Orders Index showed more promise at 61.7% vs. 59.1%. Equity markets continued to be focused on the ongoing conflict in Ukraine. Equity markets opened down and continued lower during the session albeit with several rally attempts, while closing off the lows. WTI crude oil popped 10 full dollars to close at $106.34 and interest rates declined as shown by the 10-year Note (yield) index (TNX) 17.07 -1.13. Energy Services (XLE) 71.29 +1.01% was the only sector among the 11 S&P 500 economic sectors to close up on the day. Financial Services (XLF) 37.10 -3.69% fared worst. Chevron (CVX) 149.72 +3.97% led the DJIA hitting all-time highs once again. American Express (AXP) 178.06 -8.47% was the clear laggard in that index, after the company suspended its relationships with several Russian banking institutions. Leading the NDX100, Chinese internet search firm Baidu (BIDU) 162.86 +6.84% reported better than expected earnings and revenues. The laggard in the index was electric vehicle manufacturer Lucid Group LCID) 24.99 -13.77% which missed on earnings and cut production targets. Chain discount retailer Target (TGT) 219.43 +9.84% beat on earnings, but also highlighted increasing margin pressures and wage increases.
Wednesday 3/2/2022–DIA 339.00 +1.75%, QQQ 347.22 +1.68%, SPY 437.89 +1.84%, IWM 204.24+2.38% CNN Fear/Greed 25 (Extreme Fear)
ADP Employment Change for February showed a better increase than expected: 475K vs. 388K. Fed Chairman Jerome Powell testified to the House that a ¼ point hike in the Fed Funds rate was on the agenda for the next FOMC meeting and he that the Fed expected a soft landing for the economy going forward. Equity markets continued to rally on news reports coming from Ukraine of a much slower pace by the advancing Russian forces, and the hopes for the peace talks. Interest rates rose. The 10-Year Note (yield) Index (TNX) 18.65 +1.58% moved high on the Powell testimony. As a result, Financials Services (XLF) 38.06 +2.59% led the S&P 500 eleven economic sectors. Next best was Energy Services (XLE) 72.92 +2.29%. Heavy construction machine manufacturer Caterpillar (CAT) 192.61 +5.35% led the DJIA as the stock moved back above a prior support. Semiconductor manufacturer Micron Technology (MU) 93.30 +8.16% led the NDX100; the firm will announce earnings March 29 after market close. Ross Stores (ROST) 94.19 +6.09% was second best in that index after beating earnings and giving an upbeat outlook. High end department store Nordstrom, Inc (JWN) 26.93 +37.82% also beat earnings and gave a strong outlook. On the downside in the NDX100 China internet shares saw selling pressure, Pinduoduo (PDD) 48.77 -4.34%, JD.com (JD) 71.79 -2.06% and Baidu (BIDU) 160.57 -1.41%.
Thursday 3/3/2022 – DIA 338.13 -.26%, QQQ 342.26 -1.43%, SPY 435.71 -.50%, IWM 201.82-1.18% CNN Fear/Greed 22 (Extreme Fear)
ISM Services PMI for February reported in at 56.5 much lower than the 61 expected. ISM Employment Index dropped to 48.5 (contraction) vs. the 53.5 expected. ISM Services Prices Paid reported at an elevated 83.1 but in line with expectations. . The day’s trade focused on the news flow from the Russian takeover of Ukraine. Equity markets were mixed with demonstrable rotation from high growth potential but more risky shares into higher earning dividend paying shares that exhibit more certainty and less volatility. A flight to safety bid came for US Treasuries. Interest rates continued to decline with the 10-Year Note (yield) Index 18.44 -1.13%. Real Estate (XLRE) 46.28 +1.09% performed best for the 11 economic sectors of the S&P 500, followed by Consumer Staples (XLP) 75.86 +.81% with Walmart (WMT) 139.29 +2.3% leading the DJIA. On the downside and a clear laggard in the DJIA, aircraft manufacturer and defense contractor Boeing (BA) 188.85 -4.53% moved counter to most defense related shares. Cloud and security software firm Splunk (SPLK) 122.77 +6.01% led the NDX100 after reporting positive earnings in a face of an expected loss. On the downside in that index data analytics and infrastructure monitoring firm Datadog (DDOG) 148.46 -9.74% came under selling pressure. Many high multiple stocks have seen similar selling.
Friday 3/4/2022 – DIA 336.47 -.49%, QQQ 337.30 -1.45%, SPY 432.17 -.81%, IWM 198.66 -1.57% CNN Fear/Greed Index 16 (Extreme Fear)
The Unemployment Rate was a 10th of a percent better than expected coming in at 3.8%. Non-Farm Payrolls were far better than expected coming at +678K vs. +400K. The labor Participation Rate came in at 62.3% better than the 62% expected. World markets continued to be focused on the Russia/Ukraine war. WTI crude oil 115.00 +$7.33 moved higher as traders assessed the increased possibility of tighter supplies. Energy Services (XLE) 75.23 +2.89% continued to lead the 11 S&P economic sectors, with Occidental Petroleum (OXY) 56.15 +17.59% advancing once again in to new all-time high territory, while Financial Services (XLF) 37.23 -1.87% fared the worst as a flight to quality bid forced US government bonds up in price and down in yield. The 10-Year Note (yield) Index 17.24 -1.20 moved lower. Technology (XLK) 149.75 -1.75% shares were also under pressure. Walmart (WMT) 142.82 +2.53% led the DJIA followed by United Healthcare (UNH) 498.65 +2.48%. Both have seen a benefit of rotation from high multiple concept stocks to lower multiple dividend paying lower volatility shares. Boeing (BA) 180.84 -4.24% hitting a 52 week low continued to see selling pressure. Leading the technology heavy NDX100 index, freight railroad company CSX 37.43 +6.06% saw an advance close to 52-week highs.
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