Weekly Economic Update: February 8th, 2022

Presented by Nicholas Wealth Management

February 8th, 2022

Weekly Market Update

In this week’s recap: Stocks extend last week’s rally, despite a major disappointment in the tech sector.

The Week on Wall Street

Stocks managed to gain ground last week as investors turned their focus to corporate earnings.

The Dow Jones Industrial Average rose 1.05%, while the Standard & Poor’s 500 gained 1.55%. The Nasdaq Composite index picked up 2.38% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tacked on 2.73%.^1,2,3

Earnings in Focus

At the start of the week, stocks extended the previous week’s rally with some high-growth companies leading the move higher. Strong company profits fueled the market in the middle of the week until an earnings disappointment from a mega-cap company took investors by surprise. The earnings miss deflated sentiment as it heightened worries of what it may portend for other technology companies yet to report. These anxieties led to a sell-off that reverberated across the market.

Subsequent earnings beat from several technology and social media names, and an above-consensus rise in new payrolls on Friday helped the market close with week with a solid gain.

Omicron and Unemployment

A string of employment reports pointed to a generally healthy labor market, despite the Omicron surge late last year. The Job Openings and Turnover Survey (JOLTS) showed a hiring slowdown, with near-record high job openings and worker resignations. The ADP (Automated Data Processing) employment report saw private payrolls shrink by 301,000. That was the first monthly decline since December 2020.^4,5

More encouragingly, initial jobless claims declined, while continuing jobless claims reached their lowest level since 1973. A strong January employment report showed 467,000 jobs added during the month, with upward revisions to previously released November and December.^6,7

Tip of the Week

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Facebook's parent company Meta $FB has lost more than $200 billion in market value. Mark Zuckerberg has bet the future of the company on the metaverse. David Nicholas joined Charles Payne on Fox Business last week, to share why investors don't want Facebook's future to be what Meta means in Hebrew!

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CITATIONS:

1. The Wall Street Journal, February 4, 2022

2.The Wall Street Journal, February 4, 2022

3. The Wall Street Journal, February 4, 2022

4. The Wall Street Journal, February 1, 2022

5. CNBC, February 2, 2022

6. CNBC, February 3, 2022

7.CNBC, February 4, 2022