Stocks ended a rough week, with money flowing out of growth stocks and into value stocks as Treasury yields surged across the board. The Nasdaq 100 Index fell for a fourth straight session Friday, concluding its worst week since February, as investors reconsidered high-flying tech stocks as rates rise. The yield on the benchmark 10-year yield hit 1.8% intraday Friday before ending at 1.77%, jumping 27 basis points for the week. The final catalyst was the December employment report, which showed tight labor market conditions with a slowdown in hiring and strong wage gains. The report reaffirmed expectations for the Federal Reserve to be more assertive in normalizing policy.

For the week, the Nasdaq plunged 4.5% and the S&P 500 sank 1.8%, while the Dow Jones was off only 0.3%. But the S&P closed just above its 50-day moving average, a key technical reading that has attracted dip buying in the past. 

Top S&P 500 sectors last week:

  • Energy Sector + 10.65% (ETF: XLE)
  • Financial Sector + 5.37% (ETF: XLF)
  • Industrials Sector + 0.67% (ETF: XLI)

Top news last week:

  •  Apple becomes first company to reach $ 3 trillion market Cap: The first trading day of 2022 resulted in a historic day for the U.S. stock market as Apple (AAPL) became the first company in history to reach a valuation of $3T. The tech giant crossed the market cap milestone in afternoon trading, with shares climbing nearly 3% to $182.88 apiece. Lifting investor confidence was the belief that Apple will keep launching best-selling products as it explores new markets like self-driving electric cars, augmented-reality glasses and possibly the Metaverse. Nearly 1.65B people across the globe connect to the internet through an Apple product, like the iPhone, iPad or iMac. That has led to steady revenue growth, cash flow, and key products having a strong long-term outlook. Data from Tipranks shows that many analysts from top Wall Street banks, such as: Bank of America, J.P Morgan, Morgan Stanley, Citigroup, Goldman Sachs, Wedbush … etc, are expecting AAPL price to reach $200 or even more this year.
  •  General Motors losses it’s crown of No. 1 automaker in America: After 90 years as the top-selling automaker in America, General Motors (GM) lost its sales crown to Japan’s Toyota (TM), which also became the first non-domestic automaker to take the top spot. Newly released figures showed U.S. sales for Toyota jumping 10% last year to 2.3M, compared to the 2.2M vehicles sold by GM, whose sales were down 13% for 2021. So how did Toyota do it? By Better management: The modern car can have hundreds, if not thousands, of computer chips, and with a growing semiconductor shortage, Toyota began stockpiling silicon ahead of its rivals. It was also earlier to bet on a recovering U.S. car market, cutting parts and production orders less sharply than competitors to make it better prepared for a return in demand. But Toyota is not stopping there and is planning to take on Tesla as well. The Company announced on Wednesday that they will be investing $70 billion in electric vehicles to compete against market-leader Tesla. Toyota hopes to produce a line of 30 electric vehicles by the end of the decade.
  •  Mobile sports gambling allowed in New York: New York state cleared the way for mobile sports betting in the state starting last weekend, a potential boon for licensed operators such as DraftKings, Caesars Sportsbook, Flutter Entertainment’s FanDuel, and Rush Street Interactive. The state’s gaming commission said the four have met the requirements to take and process bets and are approved to start operating starting at 9 a.m. Saturday. DraftKings already confirmed it will be up and running. New York fans who had been limited to placing sports bets in person at casinos can now do so using their mobile phones. DraftKings noted the move comes just before the NFL playoffs, one of the busiest times for sports betting all year. DKNG stock was up almost 6% on Friday after the news was announced.


Calendar:

The economic data highlights of the week will be a pair of inflation readings: The Bureau of Labor Statistics reports the consumer price index for December on Wednesday. Economists are expecting a 7.1% year-over-year spike, which would be the fastest rate of inflation since 1982. The BLS’ producer price index is out on Thursday. That measure is expected to ease slightly from November.

Earnings:

Monday, January 10:  Tilray (TLRY)

Tuesday, January 11:  Albertsons Companies (ACI).

Wednesday, January 12:  Jefferies (JEF), KB Home (KBH).

Thursday, January 13:  Delta Air Lines (DAL).

Friday, January 14:  JPMorgan (JPM), Wells Fargo (WFC), BlackRock (BLK) and Citigroup (C).