Market Stages Massive Rally Amid Interest Rate Hike

The Federal Reserve will raise interest rates for the first time since 2018

Deputy Editor
Mar 18, 2022 at 2:48 PM
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The broader market rallied this week, as investors continued to monitor Russia's invasion of Ukraine, with little progress made in peace talks between the two countries. The U.S. Federal Reserve's two-day meeting was at the forefront of investors' minds, too, concluding with the central bank raising interest rates for the first time since 2018. Meanwhile, oil prices plummeted after last week's surge to multi-year highs. Elsewhere, high inflation has been making quite the impact on economic data, with U.S. retail sales slowing in February. Meanwhile, initial weekly jobless claims came in at 214,000 for last week, which is lower than the 220,000 anticipated by analysts. At this point on Friday, both the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are on track for their best weeks since November of 2020. The Dow Jones Industrial Average (DJI) is poised to snap a five-week losing streak, as it paces for its best week since June 2020. 

Movers and Shakers

Early in the week, news came that Germany is purchasing up to 35 of Lockheed Martin's (LMT) F-35 fighter jets. The stealth jets will replace Berlin's Tornado aircraft, which has been in use since the 1980s. Elsewhere, Rio Tinto (RIO) made an all-cash $2.7 billion proposal to buy the 49% of Canada's mining name Turquoise Hill Resources (TRQ) it did not yet own. Spotify Technology (SPOT) was also in focus after signing a deal with FC Barcelona.  

Analyst Notes This Week

There was plenty of analyst chatter this week. For one, J.P. Morgan Securities called Chevron Corporation (CVX) and Occidental Petroleum Corporation (OXY) "overbought," just before news that Warren Buffet added to his original $4.5 billion stake in OXY with an additional $1.5 billion, or 27.1 million shares. Peloton Interactive (PTON) and Starbucks (SBUX) both rose after upgrades, with the latter also seeing a C-suite shakeup. Apparel stocks Ralph Lauren (RL) and Rent the Runway (RENT) both received analyst praise as well, while Wingstop (WING) slipped on a double downgrade. 

Relatively Quiet Week Ahead 

Next week looks quiet in terms of earnings, though some big names will release their reports, including Nike (NKE), Adobe (ADBE), Carnival (CCL), Cintas (CTAS), Darden Restaurants (DRI), General Mills (GIS), KB Home (KBH), RH (RH), NIO (NIO), as well as Tencent Music Entertainment (TME). Economic data will also slim, though both the Markit manufacturing and services purchasing managers' indexes (PMI) will be due out, offering investors more insight into the state of inflation in the U.S. Meanwhile, see what could be next for the S&P 500 after a dismal start to the year, and unpack these 2 key levels the index just broke below. 

 

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