Mid-Week Market Minute 04.20.22

Global stocks rallied this week as investors digested corporate earnings reports alongside central bank commentary. Shares of Netflix (NFLX) plummeted on Tuesday following the company’s quarterly earnings report. Despite beating bottom-line expectations, Netflix reported its first quarterly subscriber loss since 2011, falling shockingly short of its own forecasted gain of 2.5 million subscribers. Tech giant International Business Machines Corp. (IBM) marched higher this week following better-than-expected earnings and revenue amid ongoing strength in its hybrid-cloud offerings. The housing market took a breather in March with existing home sales declining by 2.7% alongside downward revisions for the month of February. MBA mortgage applications fell for a sixth consecutive week (-5%) as mortgage rates surged to a 12-year peak. On the other hand, housing starts increased for the month against expectations for a modest decline. Despite higher mortgage rates, acute imbalances between housing supply and demand continue to persist, as the months’ supply of existing homes available for sale remained near the lowest level on record. In central bank news, hawkish remarks from St. Louis Federal Reserve President Jim Bullard were in focus, as he said more aggressive 0.75% rate hikes “should not be ruled out” as a policy tool to quickly move interest rates to a neutral level. Market participants will continue to take cues from the Federal Reserve this week with several regional presidents slated to deliver remarks following the release of the Federal Reserve’s Beige Book on Wednesday afternoon. After climbing as high as 2.98% in overnight trading, the yield on the 10-year Treasury note traded around 2.86% on Wednesday.

Source: GSAM, Daily Upside, JPM, FactSet

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