The AP on the Street 50th week of 2022

We had a terrible week for investors, primarily due to Powell’s surprisingly hawkish speech. Also, we had a pretty intense week concerning the news.

The hottest topic of the last week was basically Powell’s relatively hawkish speech. Despite better-than-expected CPI levels, investors were quite scared after Powell’s comments.

This week, we do not have a significant week for data/ decisions, just Jobless Claims and Core PCE Price Index. So let’s take a look at what happened the previous week:

• Goldman Sachs analysts said the S&P 500 could fall 20% in a potential recession.
• Sam Bankman-Fried was arrested in the Bahamas. Charges against him include; Securities Fraud, Money Laundering, and Wire Fraud.
• Binance halted withdrawals of USDC stablecoin due to the FTX incident.
• US CPI rose 7.1% year-on-year —20 basis points better than expected. The lowest level since December 2021.
• US Core CPI rose 6.1% year-on-year —10 basis points better than expected. The lowest level since August 2021.
• Futures soared after the better-than-expected CPI numbers.
• US Dollar and US10YR tumbled after the CPI report (in anticipation of the probability of smaller rate hikes.)
• Tesla stock fell to the lowest level since November 2020.
• UK CPI rose 10.7% year-on-year —20 basis points better than expected.
• UK Core CPI rose 6.3% year-on-year —20 basis points better than expected.
• The Federal Reserve raised the interest rate by 50 basis points, making it 4.5%.
• Chairman Powell said that the FED requires significantly more evidence of cooling down inflation. He also said there is still some way to go concerning the rate hikes.
• Chairman Powell stated that the historical report warns us against premature loosening. Further, he said there would be no rate cuts until inflation reached 2%.
• Chairman Powell also said the February rate hike would depend on the upcoming data. Additionally, he said that the FED’s policy is to get closer to being restrictive enough.

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• Swiss National Bank increased the interest rate by 50 basis points, thus making it 1% —the highest level since 2008.
• Dollar rallied after Powell’s relatively hawkish comments.
• US stocks fell after Powell’s comments crashed policy pivot hopes.
• ECB increased the interest rate by 50 basis points, thus making it 2.5%.
• US Retail Sales went down -0.6% month-on-month. —50 basis points worse than expected.
• US Core Retail Sales went down -0.2% month-on-month. —40 basis points worse than expected.
• NASDAQ fell down 3% during the tech sell-off.
• Netflix shares plunged over 9% after the reports showed that the ad-supported plan is getting less attraction than expected.
• Goldman Sachs announced that they are planning to lay off thousands of employees due to the worsening macroeconomic conditions.
• US Treasury Secretary Janet Yellen said the world is facing severe economic headwinds.
• Coinbase stock fell down 5% to a new record low.

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Overall Market Indexes & Commodities Moves

DOW = -1.8%
S&P 500 = -2.0%
NASDAQ = -2.6%
RUSSELL 2000 = -1.7%
Gold = -0.6%
Silver = -1.2%
Oil = 1.2%

Weekly performance of S&P 500 Stocks

Let’s look at the most undervalued stocks list on our website:

Our Two Least Performing Stocks:

Netflix shares plunged after the reports showed that the ad-supported plan is getting less attraction than expected.

Despite beating expectations in its latest quarter, the consulting firm’s stock price declined. The company also provided guidance for the current quarter with a revenue range that fell below current estimates and stated that the impact of the stronger U.S. dollar will negatively affect its fiscal 2023 results by 5%.

TIL: What is Core PCE Price Index?

The core PCE price index is a measure of inflation that is released as part of the Personal Income and Outlays report. It excludes the categories of food and energy, which tend to have more volatile price movements, in order to better reflect the overall trend of inflation. This index is closely monitored by the Federal Reserve when making decisions about monetary policy.

Important data/ decisions that will be published next week:

Jobless Claims and Core PCE Price Index

The last week was pretty much terrible for the investors. We will see how the investors will behave after the Jobless Claims and Core PCE Price Index.

DISCLAIMER: THIS TEXT CONTAINS NO INVESTMENT ADVICE.