Growth stocks fell out of favor last week, displaying significant declines. This week looks to begin on steadier footing, but bearish sentiment continues to hover. Volatility is likely to continue.
Friday's headline jobs data thoroughly missed expectations of 400k new jobs, coming in at +199k. However, the unemployment rate was more reassuring, coming in at 3.9%, slightly beating expectations of 4.1%. Plus, signs of wage growth prevail.
Consumer price index (CPI) data is due on Wednesday, which will help steer the inflation/deflation narrative.
US Fed policymakers continue to believe interest rate rises are necessary to fight rising inflation. The first move is expected in March. Goldman Sachs expects the Fed to raise interest rates four times this year.
Uranium prices jumped 8% last week as Kazakhstan, which produces 40% of the world's supply, descended into political chaos. The consensus view is that the violence will be short-lived, but ongoing tensions could impact uranium supply, bitcoin mining, energy and commodity pricing. The geopolitical fallout also concerns Putin's reign and Russia's eyes on Ukraine.
Russian and US officials are in Geneva this week for several key talks, including a meeting with NATO on Wednesday.
Oil up. Gold down. Industrial metals mixed. Cryptocurrencies flat.
| NASDAQ | S&P 500 | BITCOIN |
|---|---|---|
| 14,935.90 (-0.96%) | 4,677.03 (-0.41%) | 41,832.91 (+0.40%) |
Here are some trending stocks:
Discovery, Inc (NYSE: DISCA) stock has been upgraded to buy from neutral at Bank of America. It reasoned that DISCA's combination with WarnerMedia has the potential to become a most dynamic global media company. The merger may also lead to significant cost savings, incremental revenue opportunities around ads, distribution and combination of streaming services. The DISCA share price rose 17% on Friday.
Delta Air Lines (NYSE: DAL) was also upgraded to buy from neutral at Bank of America. The bank cited a stronger balance sheet than peers, better valuation and more capacity discipline than other carriers, allowing for more relative pricing power.
Shockwave Medical (NYSE: SWAV) is rumored to be considering a merger after takeover interest emerged.
Cathie Wood's ARK Innovation ETF (NYSEARCA: ARKK) continues to generate considerable discussion as the debate on whether inflation or deflation lies ahead rages on.
FedEx (NASDAQ: FDX) faces aircraft shipping delays caused by COVID staffing shortages.
After achieving positive Phase 2 trial data, Novartis (NYSE: NVS) confirmed it will license ensovibep, a new drug developed with Molecular Partners (SWX: MOLN) to treat COVID-19.
Amazon (NASDAQ: AMZN) has filed new legal challenges in its ongoing dispute with Indian retailer Future Group.
Apple (NASDAQ: AAPL) is forging ahead in its ambition to upend the auto industry via EVs. It's thought to be pursuing a fabless business model by outsourcing production.
Prescription digital medicine company Akili Interactive is in talks to go public via a merger with Social Capital Suvretta Holdings Corp. I (NASDAQ: DNAA) with a combined target value of $800m. At Akili's last funding round, PureTech Health owned about 23.4% of the company. Social Capital SPACs are run by Chamath Palihapitiya.
Meanwhile, advanced biotech company ProKidney is thought to be in talks to go public via a SPAC merger with Social Capital Suvretta Holdings Corp III (NASDAQ: DNAC), with a rumored combined value of $1bn.
Papa John's International (NASDAQ: PZZA) is expanding in South China via a new partnership with FountainVest Partners. It plans to open over 1,350 new locations across South China by 2040. This is the largest deal in its history and the largest master franchise deal announced in the pizza industry in recent years.
Chewy, Inc. (NYSE: CHWY) was downgraded to neutral from overweight at Piper Sandler on margin pressures from inflation, shipping costs and customer reduction.
Due to pressure on margins, Texas Instruments (NASDAQ: TXN) has been downgraded to buy from neutral at Citi.
Due to inflation, Abercrombie & Fitch (NYSE: ANF) was downgraded to neutral from buy at UBS.
Starbucks (NASDAQ: SBUX) was downgraded to perform from outperform at Oppenheimer on margin pressures from outsized employee investments and elevated COGS inflation.
Kohl's (NYSE: KSS) has been downgraded to sell from neutral at UBS, also on rising inflation.
In Asia:
The Omicron coronavirus variant continues to spread in Asia.
Chinese Cosmetics Maker Chicmax is rumored to be planning a Hong Kong IPO with CICC, Citic Securities and JPMorgan.
In cryptocurrency news:
PayPal (NYSE: PYPL) is exploring the launch of its own stablecoin after evidence was exposed inside the company's iPhone app.
Cryptocurrency miners including, Marathon Digital (NASDAQ: MARA), Riot Blockchain (NASDAQ: RIOT), Hut 8 Mining (NASDAQ: HUT) and Bitfarms (NASDAQ: BITF), reportedly ended 2021 with solid results despite a downturn in crypto prices.
The Pudgy Penguins NFT Project turned grim over the weekend as in-fighting escalated within the project's Discord servers. It now seems the community wants the founders to leave.
