Mid-Week Market Minute 02.09.22

Market Updates

U.S. stocks were broadly higher in early trading this week as mostly positive corporate earnings helped bolster recent sentiment. As of Tuesday’s close, nearly 60% of all S&P 500 companies have reported fourth-quarter earnings and roughly 77% have topped Wall Street’s earnings estimates, according to FactSet. Investors are weighing a generally strong quarter of earnings against worries about a rapid withdrawal of pandemic-era stimulus.

In interest rates, the 10-year U.S. Treasury yield declined from three-year highs, with the 10-year trading at a level of 1.94% this morning. The benchmark yield has climbed 44 basis points (0.44%) year-to-date as market participants brace for monetary policy tightening from the Federal Reserve (Fed) as officials prioritize combating elevated inflation. Yields across Europe also fell after France’s central banker said markets may be getting ahead of themselves in pricing rate hikes for this year. Meanwhile, U.S. oil prices declined to around $89 a barrel, down from $93 a barrel last week. The prospect of de-escalating tensions over Ukraine and further progress in U.S.-Iran nuclear talks appear to be the primary drivers behind energy’s recent pause.

On the data front, MBA mortgage applications declined 8.1% in the week ending February 4, compared to the prior period’s 12% increase. Separately, a final December reading on wholesale inventories was upwardly revised to reflect a 2.2% gain. Key economic data later this week will come in the form of the consumer price (CPI) report, where consensus is for headline inflation to increase by 7.3% year-over-year. If the data shows that inflation continues to run hot, investors will worry that the Fed may move more aggressively in raising interest rates (liftoff currently expected to begin in March).

Source: GSAM, Daily Upside, JPM, FactSet

This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.

Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results.

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