Steep First-Quarter Losses Highlight Week

Oil prices and bond yields remained in focus

Deputy Editor
Apr 1, 2022 at 2:53 PM
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This week saw the end of March as well as the end of the first quarter. Though the first couple days of trading started out strong, as investors monitored talks between Russia and Ukraine, all three benchmarks turned in losses on Wednesday. To follow, the Dow Jones Industrial Average (DJI) turned in a sharp 550-point loss to end the month on Thursday, while the market suffered its worst quarter since March of 2020. Wall Street is struggling for direction at this point on Friday, with the Dow and S&P 500 Index (SPX) on track for weekly losses, while the Nasdaq Composite (IXIC) flips back and forth above positive territory for the week.

Oil prices were once again in focus this week, particularly after news that White House announced it will release 1 million barrels of oil per day from U.S. strategic reserves, while the Organization of the Petroleum Exporting Countries and its allies (OPEC+) sticks to its production plan with a small output hike for May. There was plenty of economic data throughout the week as well. Investors eyed U.S. bond yields, with several inversions throughout the week -- a sign of a potential oncoming recession.  

Plenty of Bear Notes This Week

Analysts were busy this week, as broader concerns like high inflation continue to permeate the market. Lululemon Athletica (LULU) received plenty of positive analyst attention after earnings, while the opposite can be said for Chewy (CHWY), which received no fewer than 10 price-target cuts after its report. Elsewhere, Foot Locker (FL), HP (HPQ), and Wayfair (W) all took sharp turns lower after they were downgraded, while Beyond Meat (BYND) sank after Piper Sandler cut its rating on increasing competition. Advanced Micro Devices (AMD) and Poshmark (POSH) slipped after receiving downgrades as well. 

Companies Making Headlines

As per usual, there was plenty of news to unpack as well. Two notable companies making headlines were Apple (AAPL), after reported production cuts, and Robinhood Markets (HOOD) after the trading platform extended its hours. Meanwhile, electric vehicle (EV) names Nio (NIO) and Li Auto (LI) both surged after strong March delivery reports. In acquisition items, Nielsen Holdings (NLSN) will go private after a billion-dollar buyout, while UnitedHealth (UNH) will acquire home health-care concern LHC Group (LHCG).

Quiet Week Ahead

The first week of April will be muted in terms of earnings and economic data, especially compared to this week's barrage. Still, investors will watch for the S&P Global (Markit) services purchasing managers' index (PMI), hinting at the U.S. economy's health, and the Federal Open Market Committee's (FOMC) meeting minutes. In the meantime, see what bearish newsletter sentiment means for stocks, with data compiled by Schaeffer's Senior Quantitative Analyst Rocky White. Plus, Senior V.P. of Research Todd Salamone details a short roadmap for long-term investors right now. 


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