02|08|2022

Choppy Waters | February 4, 2022

AUTHOR: Jason J. Roque, MS, CFP®, APMA®, AWMA®
TITLE:       Investment Adviser Rep – CCO
TAGS:   S&P 500, NASDAQ, CPI, FRB, Sales, Jobs

The S&P 500 gained ground last week. Are markets calming down or should choppy waters be expected?

Monday

The week opened strong as the S&P 500 rallied 1.87% into the close. The fears around rate hikes subsided as the 10-year treasury yield fell slightly. Markets will be focused on Tech this week as they were a few weeks ago on financials.

Tuesday

The S&P 500 gained 0.69%, in what was pretty much a sideways day for markets. Expectations are pretty low for this month’s jobs report due out Friday the 4th. Concerns are mounting that the January report will be pretty disappointing as it will encompass the height of Omicron.

Wednesday

Markets rose on Wednesday aided by a strong earnings report from Alphabet (Google). Additionally, they announced a stock split which was received well by investors. The S&P 500 gained 0.95% on the day.

Thursday

Markets fell sharply on Thursday, surrendering the week’s gains. The S&P 500 ended up shedding 2.43%. Factory orders fell more than expected and while services outperformed expectations, they still fell sharply. A major driver on the day was earnings as Meta missed on earnings per share. This caused their stock to dive, taking communication stocks with it.

Friday

Happy jobs Friday! Markets loved the report. Not only was the data strong, but there were revisions for the last few months (an increase of 750K jobs). So much for Omicron putting a damper on job data. The S&P 500 ended up adding 0.52% on the day.

Conclusion

The S&P 500 gained 1.55% for the week. This was the best week for the S&P 500 so far in 2022. Not shocking, given recent volatility. The coming week’s economic calendar is light; however, the earnings calendar is loaded. Expect recent volatility to continue. Currently, 77% of companies have been beating estimates. Baring disruption, we should expect the markets to welcome the increased earnings data.

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