Stock Market Today Mid-Morning Updates

On Tuesday, the Dow Jones Industrial Average is down by 300 points after a stunning market turnaround yesterday. The Nasdaq was also down as much as 4.9% on Monday before climbing to close at 0.6% higher. Investors are advised to be cautious as clarity on Fed policy will not come until Wednesday’s Federal Open Market Committee (FOMC) meeting to decide on monetary policy for the U.S.

Analysts expect this week’s meeting to likely underscore the Fed’s shift in policy priorities away from supporting growth and toward fighting inflation. The International Monetary Fund also lowered its economic forecasts for the U.S., China, and the global economy today. It cites the uncertainty about the pandemic, inflation, supply chain disruptions, and U.S. monetary tightening posing further risks. It projects global growth this year to be at 4.4%, 0.5 percentage points lower than previously forecast. In other news, Pfizer (NYSE: PFE) launched a clinical study to evaluate the safety and effectiveness of a vaccine that targets the Omicron variant.

Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are down 2.48% today while Microsoft (NASDAQ: MSFT) is also down by 2.99%. Home Depot (NYSE: HD) and Nike (NYSE: NKE) ticked lower on Tuesday as well. Among the Dow financial leaders, Visa (NYSE: V) and Goldman Sachs (NYSE: GS) are trading lower at 1.92% and 2.97% respectively.

Shares of electric vehicle (EV) leader Tesla (NASDAQ: TSLA) are down by 1.64% on Tuesday. Rival EV companies like Rivian (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID) are also down by 6.08% and 2.52% today. Chinese EV leaders like Li Auto (NASDAQ: LI) and Xpeng Motors (NYSE: XPEV) are also trading lower at 4.03% and 4.05% respectively.

Dow Jones Today: Indicators Could Point To A March Interest Rate Hike

Following the stock market opening on Tuesday, the S&P 500, Dow Jones, and Nasdaq are trading 2.30%, 1.93%, and 2.70% lower. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is down by 2.70% on Tuesday, while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also down by 2.44%.

Today, the 10-year Treasury yield moved higher ahead of the Fed’s two-day January meeting. Investors will be expecting Chairman Jerome Powell’s news conference on Wednesday afternoon and should shed more light on the central bank’s willingness to take the steps necessary to fight inflation. Against a volatile market that kicked off 2022, the Feds are likely to increase interest rates from near zero as soon as March after bond-purchase tapering ends.

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Home Prices Growth Continues To Slow Down Despite Year Over Year Gains.

Today, Standard & Poor says that its S&P CoreLogic Case-Shiller national home price index posted an 18.8% annual gain in November, decreasing from 19% in October. The 10-city composite rose 16.8% annually but is down from 17.2% in the previous month. “Despite this deceleration, it’s important to remember that November’s 18.8% gain was the sixth-highest reading in the 34 years covered by our data (the top five were the months immediately preceding November),” noted Craig Lazarra, managing director of S&P DJI.

The increase is expected since the index is a lagging indicator and more recent data shows record home price appreciation for the entire year of 2021. Last week, the National Association of Realtors (NAR) reported that the median existing-home price for all housing types in December was $358,000. This is an increase of 15.8% from a year ago.

IBM Gains After Posting Solid Growth In Fourth Quarter Earnings Call 

With the current earnings season underway, IBM (NYSE: IBM) is among the earliest tech goliaths in the limelight today. After yesterday’s closing bell, the company posted solid figures across the board. To begin with, IBM posted an earnings per share of $3.35, topping Wall Street forecasts of $3.30. Additionally, the multinational computer hardware firm also raked in a total quarterly revenue of $16.70 billion. This would be above estimates of $15.96 billion as well. Now, it is currently gaining by 0.14% as of today’s opening bell. 

In detail, the company continues to press forward after spinning off its managed infrastructure services division, Kyndryl (NYSE: KD). Among its continuing operations revenue is currently up by 6% year-over-year. More importantly, IBM’s net income for the quarter skyrocketed by 72% over the same period. By the company’s estimates, this would mark its fastest revenue growth since 2011. Commenting on all this is IBM CFO, James Kavanaugh. He notes that IBM’s strategic investments in R&D, ecosystem expansion, and acquisitions focused on boosting hybrid cloud and artificial intelligence capabilities are to thank for all this.

For the fiscal year 2022, CEO Arvind Krishna is reiterating a mid-single-digit growth for free cash flow. To put things into perspective, IBM is expecting between $10 billion and $10.5 billion on this front. As a result of all this, I could see investors eyeing IBM stock in the stock market today.

IBM stock
Source: TD Ameritrade TOS

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Telecommunications Stocks See Continued Strength As 5G Demands Surge Worldwide

In other news, telecommunication companies appear to be turning heads in the market today. For the most part, this includes Ericsson (NASDAQ: ERIC) and Verizon (NYSE: VZ). This would be thanks to both firms posting solid figures in their latest quarterly earnings calls before today’s opening bell. On one hand, Ericsson’s latest quarterly figures topped forecasts. To elaborate, it posted earnings of $0.36 per share marking a year-over-year increase of about 50%. On the revenue front, Ericsson raked in $8.06 billion for the quarter. The Swedish firm notes that the accelerating rollout of 5G networks globally continues to drive demand for its offerings. Because of all this, ERIC stock is now up by 6.06% today. 

On the other hand, Verizon seems to be making headway in the U.S. telecom market now. Diving in, the company is looking at an earnings per share of $1.31 on revenue of $34.1 billion. Notably, Verizon beat analyst estimates for both of these metrics. Among the other key metrics worth noting would be its wireless services revenue for the quarter. The likes of which, according to Verizon, are in at $17.8 billion, signaling a respectable 6.5% year-over-year increase. As such, some investors could be eager to jump on VZ stock as it dips by 0.70% now.

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