Such has been the sell-off in growth stocks since the New Year that a likely flat outcome this week will feel like a modest victory for fans. But as the heat radiated away, rather like a squash ball, a vigorous bounce has become rather mild bump. Growth bulls may feel outnumbered by growling bears but it’s hardly surprising given market gossip this week has pointed to a brought-forward Fed rate rise campaign from May to March. We’ll see.
A mixed start to reporting season for the banks hasn’t done much for the US market mood, despite rising Treasury yields, after results from Dow members JPMorgan Chase, Wells Fargo and Citigroup, the former missing on revenues, the latter on earnings on Friday.
Wells Fargo beat on both with earnings of $1.38 substantially better than the $1.10 expected by analysts. It’s the same old story of better to travel than arrive with Wall Street banks facing sky-high expectations and a sector, as measured by the KBW Bank Index, up more than 50% since the start of 2021, with Wells Fargo adding 17% this month alone.
| US markets this week | ||
| S&P 500 | Nasdaq Composite | |
| -0.34% | 0.23% | |
| Dow Jones | Russell 2000 | |
| -0.92% | -1.78% | |
| Prices at 5.30pm UK time, S&P 500 14 January 2022 | ||
Elsewhere, research firm IDC reported that the PC market was up 14.8% in 2021, with the highest number of desktops, laptops, and workstations shipped since 2012, That will come as a welcome boon to companies like Dell, Intel, Hewlitt Packard and Microsoft after years of declining PC sales.
In 2021, 349 million units were shipped globally, according to preliminary data collated by IDC. The segment had been written off with rising computing power and the increased popularity of mobile devices.
Stock of the week: TPG
The long-awaited Nasdaq IPO of private equity giant TPG surged as much as 14% on its trading debut on Thursday, giving the firm a valuation of more than $10 billion. TPG priced its IPO at $29.50 per share, selling 33.9 million shares to raise about $1 billion in proceeds at a more than $9 billion valuation, making it the biggest IPO so far in this nascent year.
Public private equity stocks have smashed the S&P 500 in recent years, providing ripe conditions for new listings. While the S&P grew about 115% over the past five years, Blackstone stock climbed 445% during the same period, KKR is up 409%, while Apollo Global and Carlyle notched 290% and 268%, respectively.
Reported this week: Delta Air Lines
Joining travel stocks everywhere, Delta Air Lines shares jumped almost 5% in the wake of Thursday’s better-than-expected fourth quarter earnings and revenues. Adjusted earnings came in at $0.22 ?per share in the holiday quarter, a 57% beat on Wall Street consensus estimates of $0.14 per share.
But Covid was not to be denied, and the increasing number of cases of Omicron remains one of the biggest risks facing the airline industry, having brought the industry to its knees in 2020. That saw Delta lose its share price gains as quickly as it won them and, irksome for investors, means the stock will possibly end the week lower than where it started it at around $40.
| Big movers this week | |||
| Range Resources | 14.4% | Equifax | -11.0% |
| Allegheny Technologies | 13.8% | L Brands | -10.8% |
| Nabors Industries | 13.6% | Berkeley Lights | -10.6% |
| Peabody Energy | 13.1% | New York Times | -10.3% |
| Halliburton | 10.9% | GameStop | -10.2% |
| Prices at 5.30pm UK time, S&P 500 14 January 2022 | |||
