Tough Week for Tech Amid Economic Data, Rising Interest Rates

Stocks managed to eke out gains midweek

Assistant Editor
Jan 14, 2022 at 3:05 PM
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It was a volatile week on Wall Street, with tech in the spotlight throughout most of it. On Monday, the Dow Jones Industrial Average (DJI) logged its fourth-straight loss, and the S&P 500 (SPX) its fifth, while the Nasdaq inched into the black by the end of the day despite pressure from Big Tech. Rising interest rates were at the front of investors' minds to start the week as well, however, all three major indexes brushed off concerns to finish the day higher on Tuesday, and extended those gains the following day. Analysts unpacked the consumer price index (CPI) midweek, which jumped 7% year-over-year, marking the largest rise in almost 40 years.

Stocks turned lower once again on Thursday, though, as the tech selloff returned. The producer price index (PPI) for December came in below analysts' estimates but still marked a 9.7% year-over-year jump -- the highest since 2010, while initial weekly jobless claims for last week came in at 30,000 above the 200,000 estimate. At this point on Friday, disappointing economic data and bank earnings are weighing heavily on the market, and all three major benchmarks are headed for weekly losses. 

Earnings Season Kicks Off

Earnings season is just beginning, with plenty of quarterly reports still ahead. So far, financial names have been the focus, with a sprinkling of other big names as well. We checked in with BlackRock (BLK)Procter and Gamble (PG) and Goldman Sachs (GS) ahead of earnings. Wells Fargo (WFC) nabbed a three-year high after its top- and bottom-line beats. Plus, KB Home (KBH) soared on an upbeat forecast, and Delta Air Lines (DAL) saw an influx of options activity during its post-earnings jump. JPMorgan Chase (JPM) is the Dow's worst performer so far on Friday, despite a quarterly win, as it was also the bank concern's worst earnings win in roughly two years.

Analyst Calls This Week

As we begin the year, plenty of analysts are making adjustments for 2022. Dell Technologies (DELL) hit an all-time high this week after an upgrade from Bernstein, while streaming name ViacomCBS (VIAC) rose after an upgrade as well. Meanwhile, UBS downgraded blue-chip stock IBM (IBM) due to its high valuation, while Guggenheim slammed Walt Disney (DIS) with a bear note. 

Bank Earnings Continue

U.S. markets are closed on Monday to celebrate Martin Luther King Jr. Day. Compared to this past week, the holiday-shortened week will be relatively quiet in terms of economic data. Still, plenty of bank earnings are on tap, including reports from  Bank of America (BAC), Charles Schwab (SCHW), Morgan Stanley (MS), PNC (PNC), and United Airlines (UAL). In the meantime, plenty of stocks are providing solid entry points for investors, with lists from Schaeffer's Senior Quantitative Analyst Rocky White.

 

 




 
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