Markets are optimistic
Jan 18th 2023, 11:05 pm
- As investors anticipate inflation data and bank results, stocks surged on Wednesday.
- Investor confidence in Thursday's consumer price index, which would show lower inflation and demonstrate the effectiveness of the Fed's rate hikes, was the main driver of investor euphoria.
- Despite a robust economy (Q4 GDP is projected to come in at 4.1%), all inflation rates have been declining, according to PCE, PPI, and CPI reports. That also holds for the most recent employment report, which revealed higher-than-expected job gains but lower-than-expected pay inflation.
- On Wednesday, stocks increased, with the Dow Jones Industrial Average rising 0.6%. The Nasdaq Composite is up, and the S&P 500 is up for the fourth day in a row.
- Bank of America upgraded shares of Lennar $LEN, PulteGroup $PHM, and Toll Brothers $TOL.
- After-market shares of KB Home $KBH decreased due to weak earnings. Barratt Homes predicted 17,475 completions, assuming that springtime business will be normal.
- Due to affordability issues, the sales rate decreased, and 77% of the forward inventory was sold for FY23.
- The forecast for the euro, which has rebounded from trading below parity with the US dollar, is now shifting from pessimistic to optimistic among analysts.
- The interest rate differential has shrunk due to the ECB's delayed tightening of the policy compared to the Fed's, strengthening the euro.
- Additional data trends point to sustained hawkishness from the ECB and a pause in Fed rate hikes, which might help the euro even more.
- Individual stocks frequently jump 10%, 15%, or even 20% or more in a single day following an earnings announcement. But to invest in the appropriate companies, you must be aware of what to search for.
- Barclays analysts decreased $AAPL stock's $133 price target and expressed concern about sluggish demand and slowing growth in the services sector. They claimed that while demand is sluggish across categories, production issues initially caused the decrease.
- After-hours trading on $DIS shares increased due to Mark Parker's appointment as chairman. Parker has served as a Disney board member for seven years and is the executive chairman of Nike. Following customer criticism, Disney has recently announced modifications to its yearly passholder program and park reservation system.
- Ubisoft said it is reducing its 2022 net bookings target and dropping three projects due to "worsening macroeconomic conditions." Due to the underwhelming success of its games, the company now anticipates a 10% decline from its original aim of 830 million euros.
- Taiwan Semiconductor $TSM released a mixed results report, but its Q4 profit exceeded forecasts. Revenue increased 27% to $19.9B, falling short of analysts' expectations by about $1B. However, the top line increased by 2% over the prior period. In premarket trading, shares of the chip manufacturer increased by 2%.
Source: Yahoo Finance