The stock market recovered from big intraday losses on Monday but struggled to make progress, reversing sharply on Wednesday as the Federal Reserve signaled a more hawkish policy in the coming months, sending yields down. Treasury. Tech titans at Microsoft (MSFT) at Apple (AAPL) increased revenues, though they were little changed for the week. Tesla (TSLA) has fallen despite beating in earnings views, as investors were frustrated with the lack of new models in 2022. Few chipmakers sold hard on earnings or guidance.
X
Stock Market Whipsaws are going down
A reversal return from steep losses on Monday triggered the start of a market rally attempt, but major indexes retreated for the week amid broad-based losses in whipsaw fashion. Treasury yields rose sharply on the hawkish Fed, but the yield curve continued to fall. Microsoft (MSFT) at Apple (AAPL) reasonably maintained its earnings and guidance, as shipping stocks weathered the market storm. Crude futures hit new multiyear highs.
Fed Signals are Aggressive Tightening
The Federal Reserve’s meeting this week clarified that monetary policy is now focused on managing the risk created by the inflation overshoot. That will begin with the first rate increase of the cycle in March, along with the termination of asset purchases. And market pricing indicates expectations that the Fed will be followed by further increases in May and June, along with two more next year. The balance tightening may also be announced in May or June. “There’s a huge amount of balance shrinkage that needs to be done,” said Fed chief Jerome Powell, after $ 4.5 trillion in bond purchases since March 2020. Powell clarified that he sees the risk of continuing high inflation – even if this is not its base case – as a greater threat to economic expansion than the moderate stock market crash.
Apple defeated the Holiday Selling Goal
The consumer electronics giant easily beat Wall Street targets for the December quarter. Sales rose 11% to $ 123.9 billion in fiscal Q1 while EPS grew 25%. The iPhone business accounted for 58% of total revenue. The company is based in Cupertino, Calif. did not provide specific financial guidance for the March quarter but said it expects “solid” revenue growth each year. Apple (AAPL) expects supply barriers to continue due to chip shortages but will decrease. Apple stock rallied on Friday.
Microsoft Leads in Revenue Target
Microsoft (MSFT) led the views in fiscal Q2 with a 22% gain in EPS as revenue climbed 20% to $ 51.7 billion. For the March quarter, Microsoft guided sales of $ 48.9 billion, up 17%. It also expects revenue growth to accelerate its Azure cloud infrastructure business. Microsoft rallied on the news but little changed for the week.
Chip Stocks Are Stumbling On Outlook
Chip-gear suppliers KLA (KLAC) at Lam Research (LRCX) guided lower estimates for the March quarter, lowering their shares. Industry peers Teradyne (TER) at MKS Instruments (MKSI) was also not watched for the current quarter. To chip makers, Texas Instruments (TXN) delivered a beat-and-raise quarterly report while Intel (INTC) estimates in Q4 but gave a mixed outlook. Silicon Motion Technology (SIMO) posted a better-than-expected result for the fourth quarter but failed in its outlook for the first quarter.
Chip Deals At Turning Point
Chinese authorities approved the AMD (AMD) takeover of Xilinx (XLNX), which may now close in early February. Meanwhile, Nvidia (NVDA) is reportedly planning to abandon its lengthy bid to buy the chip designer Arm due to regulatory challenges in the US, China and Europe.
Tesla Defeats the Watches, But No Cybertruck Soon
Tesla (TSLA) revenues rose 218% with revenue rising 65% to $ 17.719 billion., Which easily beat the Q4 view even lower than in the previous few quarters. CEO Elon Musk said the Cybertruck won’t go into production until “hopefully 2023,” while there are no current plans for a $ 25,000 sedan. Instead Tesla will focus on increasing the production of current models. Musk reiterated that Tesla will achieve self-driving in the current year. Tesla stock fell on earnings and for the week, which hit a three -month low.
Card Giants Beat Views
American Express (AXP) jumped after beating the Q4 view, citing “record” card member spending amid the broader economic recovery and its focus on attracting younger customers. American Express provided a mixed full-year outlook, but plans to boost its regular quarterly dividend by about 20%. Visa (V) at Mastercard (MA), which does not benefit from higher interest rates like AmEx, also led the estimates. Visa and Mastercard also rose.
Steel Revenue Strong, Price Cooling
Nucor (NUE), Steel Dynamics (STLD) at US Steel (X) reported income records. But all three companies offered guidance in mid-December, so investors are more focused on the outlook. STLD predicts further growth of domestic steel demand in 2022, but the increase in supply sees steel prices sinking towards more normal levels. Momentum was killed, driving NUE, STLD and X below their 200-day lines. However, the windfall from 2021 pricing will continue to pay dividends. US Steel boosted its stock buyback by $ 500 million.
AT&T Stock Hits Static
AT&T (T) reported fourth-quarter EPS rose 4% while revenue fell 10% to $ 41 billion including DirecTV’s divestiture. Both unobtrusive whip. AT&T led slightly below 2022 EPS. Also, investors are unsure of WarnerMedia’s pending integration with Discovery (DISCA). Meanwhile, Verizon (VZ) EPS rose 8% as revenue dropped 2% to $ 34.1 billion, including Verizon Media divestiture. Both slightly lost views, but postpaid wireless subscribers missed out. Verizon led in 2022. But parts of Verizon, AT&T and Discovery were sold.
Top Revenue Views of the Defense Giants
Lockheed Martin (LMT) the analyst’s expectations, but the Federal Trade Commission has sued the maker of the F-35 for its $ 4.4 billion acquisition of Aerojet Rocketdyne (AJRD). Northrop Grumman (NOC) at General Dynamics (GD) reported slightly lower EPS over views, but did not capture revenue views. Lockheed rose hard, General Dynamics rose slightly while Northrop fell.
Boeing Left to Watch, Needs Big
Boeing (BA) reported a Q4 loss of $ 7.69 per share as revenue dropped 3% to $ 14.79 billion. FactSet analysts projected a loss of 36 cents per share on revenue of $ 16.54 billion. The losses were largely due to Boeing taking a $ 3.5 billion pretax noncash charge on the 787 Dreamliner program because stopping deliveries amid talks with regulators was “longer than previously expected. The Dow aerospace giant incurred abnormal costs associated with raising the 787 to $ 2 billion, from an estimated $ 1 billion in Q3.It also charged the chaotic KC-46 tanker for the Air Force.Parts fell.
Aerospace Giants see the Cloudy Sky
General Electric (GE), Raytheon Technologies (RTX) at Textron (TXT) gave weaker -than -expected guidance for 2022 after revenues and earnings for the last quarter of 2021 were mostly lacking in views. GE’s revenues jumped 39% per share but sales dropped 7%. Raytheon’s revenues jumped 56% while revenue climbed 13%. Textron’s revenues dropped 11% while sales dropped 9%. Aerospace suppliers are struggling with hurdles from commodity price inflation and supply chain disruptions, as the pandemic lasts. GE and Textron shares fell as Raytheon rose.
Medical Giants Report
Johnson and Johnson (JNJ) at Abbott Laboratories (ABT) reported Q4 results. J&J EPS rose 15%, just above the views. Revenue climbed 10% to $ 28.4 billion, lower than expected. Abbott Labs ’EPS fell 9% and sales grew more than 7%, both leading.
Edwards Lifesciences (EW) sold after reporting EPS rose 2% and sales were 12% to $ 1.33 billion, both missing.
Service Today (NOW) reported that Q4 EPS rose 25%, slightly beating views, as revenue climbed 29% to $ 1.61 billion, a hair more than consensus. The business software giant led slightly higher in subscription revenue in 2022. Shares jumped after falling in recent weeks.
Vertex Pharmaceuticals (VRTX) revenue rose 37% per share, with sales rising 27% to $ 2.07 billion, both easy to beat. Shares rose slightly.
IBM (IBM) jumped as quarterly results beat estimates and showed signs that its multiyear restructuring was gaining traction.
Chevron (CVX) earnings missed the Q4 watch even as earnings topped forecasts. CVX stock fell on Friday from a record high.
Seagate technology (STX) revenue views, raised revenue forecasts in fiscal 2022 and raised its long -term target operating margin. Shares rose on Thursday but came out at intraday highs.
YOU MAY ALSO LIKE:
Why This IBD Tool Simplifies The Search For Top Stocks
Watch Out For The Next Big Winning Stock With MarketSmith
Best Growth Stocks to Buy And Watch
IBD Digital: Unlock IBD Premium Stock Lists, Tools, And Analysis
Time The Market Using IBD’s ETF Market Strategy