Good Saturday morning to all of you here on r/stocks! I hope everyone on this sub made out pretty nicely in the market this past week, and are ready for the new trading week ahead. 🙂
Here is everything you need to know to get you ready for the trading week beginning February 14th, 2022.
The Federal Reserve’s rate debate and Ukraine tensions could jolt markets in the week ahead – (Source)
Stocks are likely to be volatile in the week ahead as investors watch tensions between Russia and Ukraine and debate how quickly the Federal Reserve can raise interest rates.
Markets were roiled in the past week and bond yields spiked after a hot inflation reading Thursday upended many Wall Street forecasts for interest rate hikes. Investors were dealt another blow Friday after the White House warned that Russia could invade Ukraine during the Olympics. Both the U.S. and U.K. have called for their citizens to leave Ukraine as soon as possible.
“I think the Fed is keeping everyone on edge, and this is going to add to that edginess,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “So we had a three-week earnings respite from the macro. We turned micro, and this week we were reminded earnings season is pretty much over and all macro issues matter again.”
The major averages slid sharply on Friday afternoon, and Treasury yields came off the highs they set after Thursday’s report that January’s consumer price index jumped by 7.5%, a 40-year high. The S&P 500 lost 1.8% for the week, falling to 4,418.
With about two hours left to Friday trading, U.S. National Security Advisor Jake Sullivan told a White House briefing that there were signs of Russian escalation at the Ukraine border. Sullivan said it was possible an invasion could occur during the Olympics, despite speculation to the contrary.
“Up until now, I’d say it was all about monetary policy. This throws an extra unknown into the works,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “The dollar is rallying, oil prices have rallied and stocks are selling off… Even if nothing happens this weekend, people will be nervous about it in the next week.”
Boockvar said the Russian tensions complicate the central bank’s outlook, and an invasion would add to already hot global inflation. “It’s causing problems for the Fed because this basically would inflate oil prices, food prices, wheat, fertilizers and everything else and just make the Fed’s inflation fighting capability that much more difficult to maneuver,” he said. “The Fed can’t back off. You can’t blame geopolitics as a reason not to hike rates.”
He said if the central bank were concerned about an economic impact, it could slow hikes.
Fed’s inflation fight
By Friday morning, some economists had ratcheted up expectations for the Fed to hike interest rates by a half point in March, following the January inflation report. Others, like economists at Goldman Sachs, have raised their views to a faster pace, with as many as seven quarter-point hikes for this year.
Fed speakers will be a highlight in the week ahead, particularly St. Louis Fed President James Bullard who appears on CNBC’s “Squawk Box” Monday at 8:30 a.m. Bullard added to market turbulence and the sharp jump in bond yields Thursday when he said that he would like to see rates rise by 100 basis points (or 1 percentage point) by July.
“I think volatility remains elevated as we transition from essentially this more dovish Fed to this more hawkish Fed policy which we’re experiencing,” said Patrick Palfrey, senior equity strategist at Credit Suisse. “We haven’t yet settled on how hawkish we are going to be and until we can chart a new path for interest rates hikes with some consistency, I think volatility is going to remain elevated, and that’s going to be more true for high valuation companies.”
What to watch
The Federal Reserve releases minutes from its last meeting on Wednesday. Investors will watch it carefully for any new insights on its plans for rate hikes, the inflation outlook or comments on its balance sheet.
There will also be more important inflation data, when the producer price index is reported Tuesday. That report is also expected to be very hot, after January’s CPI. Surging inflation has caused consumer sentiment to slump, and now economists are watching consumer spending closely. That means January’s retail sales will also be important when it is reported Wednesday.
There is also a final rush of big earnings reports, with Cisco, Nvidia and AIG Wednesday. Walmart reports Thursday, and Deere reports Friday.
“We’re starting to transition beyond earnings, I think investors took a fair amount of comfort that profit margins stayed as high as they did,” said Palfrey. “I think the question is as we look out at the next couple of quarters, are we able to pass through prices at the same rate?”
Fed debate
Palfrey said investors are looking for more clear communications from the central bank. Bullard is the only Fed official who endorsed a 50-basis-point hike, while others, like Cleveland Fed President Loretta Mester said she does not expect to raise the fed funds target rate by more than a quarter point. Fed Chairman Jerome Powell has left the door open to a half point hike but did not say he favored it.
Fed Governor Lael Brainard speaks Friday, as does Fed Governor Christopher Waller. Mester speaks Thursday.
Other Fed officials have pushed back on Bullard’s comments. But still, there is a high level of uncertainty in the market, and bond pros are wondering if the St. Louis Fed chief will walk back his comments Monday morning.
Liz Ann Sonders, chief investment strategist at Charles Schwab, said some investors wonder if market volatility could slow the central bank’s tightening path.
“The Fed is full steam ahead. They have to be… They’re still adding to the balance sheet. We’re still at zero on rates,” she said. “There’s nothing in my mind, unless an asteroid lands on earth and blows us all to smithereens, that makes the Fed say we’re fine, we’re going to stay at zero.”
“They’re admitting themselves they’re behind the curve. They let the inflation cat out of the bag. I don’t think they thought it would have the traction it has had,” she said.
Rate rally and reverse
When bonds sell off, yields go higher and they jumped this past week. The 10-year yield was as high as 2.06% Friday. After the Ukraine news, the 10-year yield was back down to about 1.93%.
The 2-year yield was at a high of 1.63% Friday, up from 1.32% the week earlier. The biggest moves were Thursday, and the yield on the 2-year note moved more than 20 basis points Thursday. But by Friday afternoon, it had fallen back to 1.51%.
This past week saw the following moves in the S&P:
(CLICK HERE FOR THE FULL S&P TREE MAP FOR THE PAST WEEK!)
S&P Sectors for this past week:
(CLICK HERE FOR THE S&P SECTORS FOR THE PAST WEEK!)
Major Indices for this past week:
(CLICK HERE FOR THE MAJOR INDICES FOR THE PAST WEEK!)
Major Futures Markets as of Friday's close:
(CLICK HERE FOR THE MAJOR FUTURES INDICES AS OF FRIDAY!)
Economic Calendar for the Week Ahead:
(CLICK HERE FOR THE FULL ECONOMIC CALENDAR FOR THE WEEK AHEAD!)
Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday's close:
(CLICK HERE FOR THE CHART!)
S&P Sectors for the Past Week:
(CLICK HERE FOR THE CHART!)
Major Indices Pullback/Correction Levels as of Friday's close:
(CLICK HERE FOR THE CHART!)
Major Indices Rally Levels as of Friday's close:
(CLICK HERE FOR THE CHART!)
Most Anticipated Earnings Releases for this week:
(CLICK HERE FOR THE CHART!)
Here are the upcoming IPO's for this week:
(CLICK HERE FOR THE CHART!)
Friday's Stock Analyst Upgrades & Downgrades:
(CLICK HERE FOR THE CHART LINK #1!)
(CLICK HERE FOR THE CHART LINK #2!)
(CLICK HERE FOR THE CHART LINK #3!)
(CLICK HERE FOR THE CHART LINK #4!)
(CLICK HERE FOR THE CHART LINK #5!)
First Trading Day of February Monthly Options Expiration Week DJIA Down 9 of Last 17
In addition to being Valentine’s Day, next Monday is also the first trading day of February’s monthly option expiration week. Traders looking to roll or exit positions may begin first thing next week. Since 1990, Monday or the first trading day of the week has a bullish record. S&P 500 has enjoyed the greatest frequency of gains, up 23 times in 32 years with an average gain of 0.26% on Monday. Russell 2000 is second best since 1990 with 21 gains. However, since 2005 the day has seen less bullishness with DJIA down 9 of the last 17 and its average performance slipping to just 0.09%. S&P 500, NASDAQ and Russell 2000 have held up better over the last 17 years when compared to DJIA.
(CLICK HERE FOR THE CHART!)
Super Bowl Indicator
Americans across the country are gearing up for Super Bowl LVI this Sunday. The Rams are currently a four-point favorite, and the Bengals could struggle to contain the league's best defensive line. Both teams come into this game with their respective offenses on fire, and the last few weeks of the playoffs have resulted in nail-biting finishes.
One outlandish market theory suggests that when the NFC wins the Super Bowl the market will perform better than average. Conversely, when the AFC wins, the market underperforms. Although there is no basis of truth to justify these claims, the conclusion has historically been accurate. As you can see from the table below, the S&P 500 averages a gain of 10.3% from the Super Bowl through year-end when the NFC takes home the Lombardi trophy. On the other hand, when the AFC wins the Super Bowl, the S&P 500 averages a gain of 6.2%, which is 4.1 percentage points lower. The positivity rates have slightly favored an NFC victory as well (78.6% vs 70.4%).
(CLICK HERE FOR THE CHART!)
Neither the Rams nor the Bengals have won multiple Super Bowls. The Rams have won just once (in 2000), and this is the Bengals third time competing in the Super Bowl. Of the teams that have won multiple Super Bowls, the S&P 500 has performed best through year-end when the Steelers, 49ers, Broncos, or Bucs take home the trophy. After the Dolphins, Raiders, and Giants won Super Bowls, forward returns were negative on an average basis.
Given that the one Super Bowl the Rams won was in 2000, you would think that the last thing a bull would want to see on Sunday is a win by Matt Stafford and crew. On the other hand, in the two prior Super Bowls that the Bengals played in and lost, the S&P 500 was up over 20% for the remainder of the year both times, so it's a bit of a push. Within the Bespoke crew, the Bengals are a near but not unanimous pick, Who has heads on the coin toss?
(CLICK HERE FOR THE CHART!)
Do Stocks Want The Bengals or Rams to Win?
The Super Bowl Indicator suggests stocks rise for the full year when the Super Bowl winner has come from the original National Football League (now the NFC), but when an original American Football League (now the AFC) team has won, stocks fall. We would be the first to admit that this indicator has no connection to the stock market, but “data don’t lie”: The S&P 500 Index has performed better, and posted positive gains with greater frequency, over the past 55 Super Bowl games when NFC teams have won.
It was originally discovered in 1978 by Leonard Kopett, a sportswriter for the New York Times. Up until that point, the indicator had never been wrong.
A simpler way to look at the Super Bowl Indicator is to look at the average gain for the S&P 500 when the NFC has won versus the AFC—and ignore the history of the franchises. As shown in the LPL Chart of the Day, this similar set of criteria has produced an average price return of 10.8% when an NFC team has won, compared with a return of 7.1% with an AFC winner. An NFC winner has produced a positive year 79% of the time, while the S&P 500 has been up only 65% of the time when the winner came from the AFC.
(CLICK HERE FOR THE CHART!)
So should the bulls be rooting for the Rams? Maybe not. Stocks have actually done just fine lately when the AFC has won. In fact, the S&P 500 Index gained 10 of the past 11 years after an AFC Super Bowl champ.
“Interestingly, there have been 55 Super Bowl winners, yet only 20 teams account for those wins,” said LPL Financial Chief Market Strategist Ryan Detrick. “Of course, we’d never suggest investing based on this, but history would say that lately AFC teams have been quite good for stocks, but I’m also a Bengals fan, so I’m clearly biased.”
(CLICK HERE FOR THE CHART!)
Here’s a breakdown of the 20 Super Bowl winners and how the S&P 500 has done following their victories. The author’s favorite team, The Cincinnati Bengals, isn’t on this list just yet. Hopefully that changes this time next week.
(CLICK HERE FOR THE CHART!)
Lastly, Tom Brady won’t be in this Super Bowl and won’t be in any more now that he has retired. He played in a record 10 Super Bowls and won a record 7 of them. Maybe something he should be known for is the Brady Indicator, as when he won the big game stocks did well and when he lost, they didn’t.
(CLICK HERE FOR THE CHART!)
Here are the most notable companies reporting earnings in this upcoming trading week ahead-
(CLICK HERE FOR NEXT WEEK'S MOST NOTABLE EARNINGS RELEASES!)
(CLICK HERE FOR NEXT WEEK'S HIGHEST VOLATILITY EARNINGS RELEASES!)
(CLICK HERE FOR THE MOST NOTABLE EARNINGS RELEASES FOR FEBRUARY 2022!)
(CLICK HERE FOR THE NOTABLE EARNINGS BEFORE THE OPEN ON MONDAY!)
Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:
Monday 2.14.22 Before Market Open:
(CLICK HERE FOR MONDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)
Monday 2.14.22 After Market Close:
(CLICK HERE FOR MONDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)
Tuesday 2.15.22 Before Market Open:
(CLICK HERE FOR TUESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)
Tuesday 2.15.22 After Market Close:
(CLICK HERE FOR TUESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)
Wednesday 2.16.22 Before Market Open:
(CLICK HERE FOR WEDNESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)
Wednesday 2.16.22 After Market Close:
(CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES LINK #1!)
(CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES LINK #2!)
Thursday 2.17.22 Before Market Open:
(CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES LINK #1!)
(CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES LINK #2!)
Thursday 2.17.22 After Market Close:
(CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES LINK #1!)
(CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES LINK #2!)
Friday 2.18.22 Before Market Open:
(CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES LINK!)
Friday 2.18.22 After Market Close:
([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
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NVIDIA Corp. $239.49
NVIDIA Corp. (NVDA) is confirmed to report earnings at approximately 4:20 PM ET on Wednesday, February 16, 2022. The consensus earnings estimate is $1.22 per share on revenue of $7.41 billion and the Earnings Whisper ® number is $1.26 per share. Investor sentiment going into the company's earnings release has 85% expecting an earnings beat The company's guidance was for earnings of $1.16 to $1.28 per share. Consensus estimates are for year-over-year earnings growth of 53.46% with revenue increasing by 48.11%. Short interest has decreased by 4.6% since the company's last earnings release while the stock has drifted lower by 26.0% from its open following the earnings release to be 6.0% above its 200 day moving average of $225.84. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, January 25, 2022 there was some notable buying of 10,010 contracts of the $235.00 put expiring on Friday, February 18, 2022. Option traders are pricing in a 10.9% move on earnings and the stock has averaged a 3.7% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Palantir Technologies Inc. $13.13
Palantir Technologies Inc. (PLTR) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, February 17, 2022. The consensus earnings estimate is $0.04 per share on revenue of $413.99 million and the Earnings Whisper ® number is $0.05 per share. Investor sentiment going into the company's earnings release has 65% expecting an earnings beat The company's guidance was for revenue of approximately $418.00 million. Consensus estimates are for earnings to decline year-over-year by 42.86% with revenue increasing by 28.53%. Short interest has increased by 42.3% since the company's last earnings release while the stock has drifted lower by 49.3% from its open following the earnings release to be 40.2% below its 200 day moving average of $21.95. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, January 26, 2022 there was some notable buying of 29,706 contracts of the $15.00 call and 29,190 contracts of the $15.00 put expiring on Friday, February 18, 2022. Option traders are pricing in a 13.6% move on earnings and the stock has averaged a 10.3% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Shopify Inc. $854.00
Shopify Inc. (SHOP) is confirmed to report earnings at approximately 7:00 AM ET on Wednesday, February 16, 2022. The consensus earnings estimate is $1.46 per share on revenue of $1.70 billion and the Earnings Whisper ® number is $1.67 per share. Investor sentiment going into the company's earnings release has 62% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 21.93% with revenue increasing by 73.87%. Short interest has increased by 27.1% since the company's last earnings release while the stock has drifted lower by 36.7% from its open following the earnings release to be 37.0% below its 200 day moving average of $1,356.01. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, January 6, 2022 there was some notable buying of 1,524 contracts of the $1,180.00 put and 1,507 contracts of the $1,180.00 call expiring on Friday, February 18, 2022. Option traders are pricing in a 12.9% move on earnings and the stock has averaged a 5.8% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Roblox Corporation $66.81
Roblox Corporation (RBLX) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, February 15, 2022. The consensus estimate is for a loss of $0.13 per share on revenue of $777.39 million and the Earnings Whisper ® number is ($0.11) per share. Investor sentiment going into the company's earnings release has 63% expecting an earnings beat. Short interest has decreased by 17.6% since the company's last earnings release while the stock has drifted lower by 32.9% from its open following the earnings release to be 22.4% below its 200 day moving average of $86.07. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, February 3, 2022 there was some notable buying of 4,602 contracts of the $70.00 call expiring on Friday, February 18, 2022. Option traders are pricing in a 18.4% move on earnings and the stock has averaged a 21.6% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Upstart Holdings, Inc. $100.02
Upstart Holdings, Inc. (UPST) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, February 15, 2022. The consensus earnings estimate is $0.52 per share on revenue of $262.84 million and the Earnings Whisper ® number is $0.58 per share. Investor sentiment going into the company's earnings release has 73% expecting an earnings beat The company's guidance was for earnings of $0.50 to $0.52 per share on revenue of $255.00 million to $265.00 million. Consensus estiamtes are for year-over-year revenue growth of 203.13%. Short interest has increased by 150.3% since the company's last earnings release while the stock has drifted lower by 58.8% from its open following the earnings release to be 46.3% below its 200 day moving average of $186.12. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, February 8, 2022 there was some notable buying of 1,273 contracts of the $430.00 call expiring on Friday, January 20, 2023. Option traders are pricing in a 25.4% move on earnings and the stock has averaged a 34.1% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Roku Inc $163.94
Roku Inc (ROKU) is confirmed to report earnings at approximately 4:05 PM ET on Thursday, February 17, 2022. The consensus earnings estimate is $0.07 per share on revenue of $897.12 million and the Earnings Whisper ® number is $0.25 per share. Investor sentiment going into the company's earnings release has 69% expecting an earnings beat The company's guidance was for revenue of $885.00 million to $900.00 million. Consensus estimates are for earnings to decline year-over-year by 85.71% with revenue increasing by 38.04%. Short interest has increased by 36.5% since the company's last earnings release while the stock has drifted lower by 43.4% from its open following the earnings release to be 46.5% below its 200 day moving average of $306.64. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, January 27, 2022 there was some notable buying of 2,283 contracts of the $100.00 put and 1,542 contracts of the $210.00 call expiring on Friday, February 18, 2022. Option traders are pricing in a 15.8% move on earnings and the stock has averaged a 7.7% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Trade Desk, Inc. $76.30
Trade Desk, Inc. (TTD) is confirmed to report earnings at approximately 7:30 AM ET on Wednesday, February 16, 2022. The consensus earnings estimate is $0.26 per share on revenue of $389.20 million and the Earnings Whisper ® number is $0.30 per share. Investor sentiment going into the company's earnings release has 77% expecting an earnings beat The company's guidance was for revenue of at least $388.00 million. Consensus estimates are for earnings to decline year-over-year by 24.20% with revenue increasing by 21.66%. Short interest has decreased by 19.5% since the company's last earnings release while the stock has drifted lower by 9.5% from its open following the earnings release to be 0.3% above its 200 day moving average of $76.09. Overall earnings estimates have been revised lower since the company's last earnings release. On Friday, February 11, 2022 there was some notable buying of 929 contracts of the $72.00 put expiring on Friday, February 18, 2022. Option traders are pricing in a 17.8% move on earnings and the stock has averaged a 15.8% move in recent quarters.
(CLICK HERE FOR THE CHART!)
DraftKings Inc. $23.33
DraftKings Inc. (DKNG) is confirmed to report earnings at approximately 7:00 AM ET on Friday, February 18, 2022. The consensus estimate is for a loss of $0.82 per share on revenue of $442.45 million and the Earnings Whisper ® number is ($0.94) per share. Investor sentiment going into the company's earnings release has 62% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 18.84% with revenue increasing by 37.31%. Short interest has increased by 34.7% since the company's last earnings release while the stock has drifted lower by 44.9% from its open following the earnings release to be 46.2% below its 200 day moving average of $43.39. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, February 2, 2022 there was some notable buying of 17,241 contracts of the $19.00 put expiring on Friday, February 18, 2022. Option traders are pricing in a 14.8% move on earnings and the stock has averaged a 4.6% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Walmart Inc. $135.33
Walmart Inc. (WMT) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, February 17, 2022. The consensus earnings estimate is $1.49 per share on revenue of $151.74 billion and the Earnings Whisper ® number is $1.60 per share. Investor sentiment going into the company's earnings release has 59% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 7.19% with revenue decreasing by 0.22%. Short interest has decreased by 8.5% since the company's last earnings release while the stock has drifted lower by 6.7% from its open following the earnings release to be 5.0% below its 200 day moving average of $142.44. Overall earnings estimates have been unchanged since the company's last earnings release. On Wednesday, February 9, 2022 there was some notable buying of 12,003 contracts of the $150.00 put expiring on Friday, March 18, 2022. Option traders are pricing in a 4.6% move on earnings and the stock has averaged a 2.2% move in recent quarters.
(CLICK HERE FOR THE CHART!)
Airbnb, Inc. $166.53
Airbnb, Inc. (ABNB) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, February 15, 2022. The consensus earnings estimate is $0.05 per share on revenue of $1.46 billion and the Earnings Whisper ® number is $0.08 per share. Investor sentiment going into the company's earnings release has 55% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 100.46% with revenue increasing by 69.91%. Short interest has decreased by 3.4% since the company's last earnings release while the stock has drifted lower by 10.5% from its open following the earnings release to be 4.7% above its 200 day moving average of $159.07. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, February 11, 2022 there was some notable buying of 4,465 contracts of the $205.00 call expiring on Friday, February 18, 2022. Option traders are pricing in a 10.3% move on earnings and the stock has averaged a 7.9% move in recent quarters.
(CLICK HERE FOR THE CHART!)
DISCUSS!
What are you all watching for in this upcoming trading week?
I hope you all have a wonderful weekend and a great trading week ahead r/stocks. 🙂
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