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Daily Market Report | January 6, 2022


Stocks Fall as Tech Selloff Worsens – Wall Street Journal, 1/6/2022

  • Technology stocks continued to fall at the open, as the prospect of interest rate rises briefly pushed Treasury yields to their highest levels since the start of the pandemic.
  • All three major U.S. stock indexes sank in recent trading after whipsawing early in the session. At one point, it seemed that indexes were on track to reverse their losses. That quickly faded after a selloff in technology stocks and other sectors worsened.
  • On Wednesday, the index posted its biggest daily loss since February after minutes of the Federal Reserve’s most recent meeting showed officials eyeing a faster timetable for raising rates.
  • Treasury yields rose for a fourth consecutive day, reflecting investors’ conviction that the fast-spreading Omicron variant won’t stop the Fed tightening monetary policy to tame inflation.
  • The yield on 10-year Treasury notes at one point rose to 1.751%, which would be its highest closing level since January 2020, before slipping back to 1.732%.
  • Traders in interest-rate futures are pricing in a 71% chance that the Fed will raise its short-term target rate from its range of 0% to 0.25% by the end of its March meeting.
  • That is up from about 32% a month ago, shortly after Omicron emerged, according to CME Group data.
  • Bank stocks such as Bank of America and JPMorgan Chase got a boost from rising yields in Thursday trading.
  • Global markets followed Wall Street lower. Tech stocks retreated in Europe, helping to pull the Stoxx Europe 600 down 1.5%. Japan’s Nikkei 225 lost 2.9% and China’s Shanghai Composite Index fell 0.3%.
  • On the economic front, Labor Department data showed there were 207,000 initial jobless claims, a proxy for layoffs, last week. A tightening labor market is one factor behind the Fed’s pivot toward raising rates sooner than the central bank had previously signaled.
  • Commodity markets were mixed Thursday. Brent-crude futures, the benchmark in energy markets, rose 1.5% to $82.01 a barrel after violence erupted in Kazakhstan, a major oil producer.
  • Precious metals, which typically fall when interest rates rise, lost ground, with silver dropping more than 4% to $22.07 a troy ounce.

Italy Mandates Vaccines for Older People; U.S. Surge Continues – Wall Street Journal, 1/6/2022

  • Italy made vaccination mandatory for older people, adopting some of the toughest vaccine requirements in the West in a bid to curb Covid-19 and Omicron’s spread, as figures from New York suggested the new variant produces fewer cases of severe disease.
  • The U.S. registered 643,660 cases Wednesday, down from record levels seen at the start of the week when more than one million cases were recorded following the holiday backlog. The seven-day average of daily case reports in the country continued to climb, however, reaching 574,725 on Wednesday, up from 303,476 the previous week, according to a Wall Street Journal analysis of data from Johns Hopkins University.
  • As cases rise, President Biden and his administration are preparing Americans to accept the virus as a part of daily life, in a break from when he took office a year ago pledging to rein in the pandemic.
  • Hospitalizations for confirmed or suspected Covid-19 in the U.S. are up 58% over the past two weeks, at a seven-day average of 110,334 as of Wednesday, according to the U.S. Department of Health and Human Services.
  • Deaths from the disease, however, have remained relatively flat for the past week in the U.S., with the seven-day average of daily reported deaths at 1,223 on Wednesday, according to JHU data.
  • The Italian government issued a decree late Wednesday that allows authorities to fine anyone 50 years of age or older who remains unvaccinated after Feb. 1.
  • The measures come amid a surge in Covid-19 infections, hospitalizations and deaths across Europe’s largest economies. Over the past week, new infections in Italy more than doubled to 900,000, from the previous week. Deaths increased by 17%.
  • Workers who flout these rules will be suspended without pay and face a cash fine of up to €1,500, equivalent to $1,700.
  • France’s National Assembly passed a bill Thursday that bars the unvaccinated from entering restaurants, cafes and many other public venues. That would roll back provisions that currently allow the unvaccinated to gain access by showing a negative test.
  • Germany’s federal government is meeting with the leaders of its 16 states on Friday to discuss possible new measures to curb the spread of Omicron. The Health Minister Karl Lauterbach said new restrictions, including more social distancing, would be necessary to mitigate the new wave of the pandemic.
  • The German parliament will debate later this month a possible general vaccination mandate, which would add pressure on the unvaccinated, who already must produce a negative test to use nonessential shops and public transport, as well as other services.
  • A series of protests—some of them violent —against these restrictions have taken place across Germany. On Wednesday night, protesters tried to break through a police blockade in Munich, prompting officers to use batons and pepper spray to disperse them, a police spokesman said.

Walgreens Posts Higher Quarterly Profit, Raises Guidance – Wall Street Journal, 1/6/2022

  • Walgreens Boots Alliance said sales and profits rose in its latest quarter, and raised its full-year forecast as demand for Covid-19 vaccines and at-home tests continued to draw customers to its stores.
  • Overall, Walgreens posted sales of $33.90 billion for the fiscal first quarter, up from $31.44 billion in the same period last year.
  • Analysts surveyed by FactSet expected sales of $32.88 billion.
  • Demand for at-home Covid-19 tests helped drive a 24.7% increase in health and wellness sales. Overall comparable retail sales increased 10.6% compared with the year-ago period, the biggest increase in over 20 years, Walgreens said.
  • Prescriptions filled rose by 6.2% in the latest quarter on a comparable basis.
  • The company posted net income of $3.6 billion for the quarter, compared with a loss of $308 million in the year-ago quarter.
  • That includes a $2.5 billion after-tax gain in the most recent quarter due to the valuation of the company’s previously held equity and debt investments in VillageMD and Shields, as well as a $1.2 billion charge from the company’s equity earnings in AmerisourceBergen in the year-ago period.

Bed Bath & Beyond Posts Quarterly Loss Amid Supply-Chain Disruptions – Wall Street Journal, 1/6/2022

  • Sales declined substantially for the second straight quarter for Bed Bath & Beyond, the company said, amid continued supply-chain strains the home-goods retailer has faced since last summer.
  • The company saw sales fall 28% year over year to $1.88 billion in the three months through November, it said Thursday.
  • A year ago, its sales in the period were $2.62 billion.
  • Comparable sales, a metric that adjusts for changes to store counts and divestitures, were down 7% year over year.
  • Bed Bath & Beyond posted a loss of $2.78 a share, a slide from its loss of 61 cents a share a year ago.

GM to chase Ford, Rivian with a $105,000 electric Silverado pickup – Reuters, 1/6/2022

  • General Motors’s $35 billion electric-vehicle strategy will face its biggest test in 2023 when it launches an electric version of its Chevrolet Silverado pickup with a six-figure price tag, more than a year after rivals Ford Motor and Rivian Automotive launched their own electric pickups.
  • GM Chief Executive Mary Barra told the annual CES technology conference via video on Wednesday that the electric Silverado will launch in two stages in 2023, starting in the second quarter with a $39,900 WT work truck that will be delivered to a limited group of commercial fleets.
  • In the fall of 2023, GM plans to start delivering a consumer, outdoor adventure-oriented model that will start at $105,000 – more than an electric Mercedes EQS sedan.
  • By 2035, Barra said, GM plans to offer an electric heavy-duty pickup truck, which would use batteries to replace the carbon-intensive diesel engines currently favored in trucks used primarily for heavy trailer hauling. Chevrolet also plans an off-road “Trail Boss” version of the electric pickup, she said.

Conagra warns inflation will take bigger bite out of margins – Reuters, 1/6/2022

  • Conagra Brands missed market expectations for quarterly profit on Thursday and warned of weaker full-year margins as the Slim Jim beef jerky maker reels under a surge in the price of raw materials and shipping costs.
  • Net sales rose 2.1% to $3.06 billion in the second quarter, beating analysts’ estimates of $3.02 billion, according to Refinitiv data.
  • Net income attributable to the company declined to $275.5 million, or 57 cents per share, in the quarter ended Nov. 28, from $378.9 million, or 77 cents per share, a year earlier.
  • Conagra, whose shares were down 2% in premarket trading, said it expected full-year adjusted operating margin to come in around 15.5%, compared with about 16% estimated previously.
  • The Duncan Hines cake mixes maker projected gross inflation to be 14% for the year, higher than its previous view of about 11%.
  • Conagra also lifted its annual core sales forecast to a rise of about 3%, from its prior estimate of a 1% growth.

Rivian Plunges Below IPO Price on Mounting EV Competition – Bloomberg, 1/6/2022

  • Rivian Automotive, the electric pickup maker backed by, fell below the $78 a share price of its November initial public offering.
  • The move extends a drop from Wednesday, the biggest since mid-November, after Amazon announced a deal with Stellantis NV for an electric delivery van, a threat to Rivian, which is also working on E-vans for the e-commerce giant.
  • The shares fell as much as 17% Thursday to $75.13 in New York before slightly paring the loss. They were down 13% as of 10:14 a.m.

Target holiday shopper traffic growth topped Walmart, Best Buy – Reuters, 1/6/2022

  • Shopper foot traffic grew at Target during the recent holiday season compared with two years earlier, while visits to both Walmart and Best Buy stores fell overall, according to data provided exclusively to Reuters measuring shopper visits from Nov. 1 to Dec. 25.
  • Shopper traffic at Target stores rose 6.2% through the holiday period compared with two years ago, pre-pandemic, according to, a research firm that collects anonymized location data from 30 million mobile devices across the country.
  • At rivals Walmart and Best Buy, traffic declined by 0.1% and 11.5%, respectively, the data shows.
  • Target store traffic increased in every part of the country except Hawaii and Washington D.C., with footfall rising nearly 24% in Vermont and Idaho, compared with 2019, according to
  • According to Refinitiv I/B/E/S, Target’s holiday quarter sales are expected to rise by more than a third versus 2019, while Walmart’s revenue is forecast to rise by about 7% and Best Buy sales are expected rise by about 10%.

Nike Sues Lululemon for Patent Infringement Over Mirror Fitness Technology – Wall Street Journal, 1/6/2022

  • Nike filed a lawsuit alleging Lululemon Athletica’s Mirror home-fitness device and applications infringe on the sneaker company’s portfolio of patents.
  • Nike says the Mirror Home Gym and apps use technology that the sneaker giant invented and patented, including a device that prompts users to exercise, monitors their heart rate and collects data on their activity, among other functions, according to the lawsuit, filed in the Southern District of New York.
  • Nike said it sent a notice to the yoga pants maker on Nov. 3, citing a list of patents it owned that were allegedly being used by the Mirror device and its apps.
  • A response from Lululemon’s lawyer, filed as an exhibit by Nike, said that after reviewing Nike’s letter the company didn’t believe that the Mirror or its apps were infringing on the patents.

Meme Stocks Slump to Start New Year – Wall Street Journal, 1/6/2022

  • A U.S. stock market selloff is hitting shares of meme stocks particularly hard, dragging down companies that became favorites among individual investors last year.
  • Shares of GameStop and AMC Entertainment have tumbled in the first trading week of 2022, losing 13% and 16%, respectively.
  • It is a turnaround from 2021, when so-called retail investors banded together to send the shares soaring. GameStop and AMC, both struggling businesses when retail investors discovered them en masse last year, finished 2021 with gains of 688% and 1,183% for the year.
  • GameStop and AMC aren’t alone in their losses. Other stocks popular among individual investors have slumped this week. Meme stock Bed Bath & Beyond, software company Palantir Technologies and U.S.-traded American depositary receipts for Chinese electric-vehicle maker NIO are all down nearly 6% or more


Fed Minutes Point to Possible Rate Increase in March – Wall Street Journal, 1/6/2022

  • Federal Reserve officials at their meeting last month eyed a faster timetable for raising interest rates this year, potentially as soon as in March, amid greater discomfort with high inflation.
  • Minutes of their Dec. 14-15 meeting, released Wednesday, showed officials believed that rising inflation and a very tight labor market could call for lifting short-term rates “sooner or at a faster pace than participants had earlier anticipated.”
  • Some officials also thought the Fed should start shrinking its $8.76 trillion portfolio of bonds and other assets relatively soon after beginning to raise rates, the minutes said. Investors would see the move as another way for the Fed to tighten financial conditions to cool the economy.
  • “The whole point of accelerating the tapering was…so the March meeting could be a live meeting” to raise rates, said Fed governor Christopher Waller in remarks on Dec. 17. “That was the intent.”
  • Several officials said last month that higher inflation pressures could force the Fed to raise rates before the employment goal had been met, and some officials thought it had already been met, according to the minutes.

U.S. Initial Jobless Claims Rose to 207,000 Last Week, Remain Near Historic Lows – Bloomberg, 1/6/2022

  • Applications for U.S. state unemployment benefits rose last week, though remained near historic lows, as the labor market withstood the recent surge in Covid-19 cases.
  • Initial unemployment claims totaled 207,000 in the week ended Jan. 1, up 7,000 from the prior period, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 195,000 applications.
  • On an unadjusted basis, claims rose by nearly 58,000 to 315,469.
  • Continuing claims for state benefits rose to 1.75 million in the week ended Dec. 25.

U.S. Trade Deficit Widens as Imports Surge to a Record – Bloomberg, 1/6/2022

  • The U.S. trade deficit widened in November, reflecting a surge in the value of imports as domestic retailers made a final push to stock shelves for holiday shoppers and demand for foreign oil increased.
  • The gap in trade of goods and services expanded to $80.2 billion, from a revised $67.2 billion in October, according to Commerce Department data released Thursday.
  • The value of imports increased to $304.4 billion, while exports grew to $224.2 billion, also a record.
  • The nation’s surplus in services trade increased to $18.8 billion, the highest in five months.
  • The 12.7% advance from a month earlier was the largest since September 2004
  • The merchandise-trade deficit, which strips out services, widened to record $99 billion.

Growth at U.S. Service Providers Sees Sharp Pullback From Record – Bloomberg, 1/6/2022

  • A measure of U.S. service providers pulled back abruptly in December after soaring to a record a month earlier, reflecting more moderate growth in business activity and orders.
  • The Institute for Supply Management’s gauge of services activity dropped to 62 from 69.1 a month earlier, according to data released Thursday.
  • The 7.1-point decline was the sharpest since April 2020 and may suggest that the omicron variant of the coronavirus is beginning to take a toll on providers of in-person services like travel, dining out and entertainment. Even so, the services gauge remains well above pre-pandemic levels.
  • The group’s supplier deliveries index dropped to a nine-month low of 63.9, from a November reading of 75.7. A little more than 36.4% of respondents reported slower delivery times, the smallest share since April.
  • The ISM gauge of business activity, which parallels the group’s factory production measure, fell to a three-month low of 67.6 from a record in November.
  • Orders received by service providers dropped 8.2 points to 61.5, the lowest reading since February. The November orders index was the highest in data back to 1997.
  • A measure of employment cooled, falling to 54.9 from 56.5 in the prior month. Service providers have been struggling to hire and retain employees in a competitive labor market where businesses are offering higher wages and bonuses to lure workers.
  • The report also indicated that inflationary pressures continued to mount for service providers. The ISM index of prices paid for materials edged up to 82.5, from 82.3 in November.


Kazakhstan Protests: Dozens Killed as Authorities Crack Down on Unrest – Wall Street Journal, 1/6/2022

  • Dozens of people were killed in Kazakhstan on Thursday as authorities moved against protesters in the Central Asian nation after several days of unrest and a Russia-led alliance of troops from former Soviet states arrived to support local forces.
  • Russian news agency TASS reported that dozens of attackers were killed as they stormed administrative buildings and the police department in Almaty, Kazakhstan’s largest city.
  • They “have been eliminated and their identities are being established,” Saltanat Azirbek, a spokeswoman for the city’s police department, said on Kazakh state television channel Khabar 24, according to TASS.
  • The channel also reported that 12 law enforcement officers were killed and more than 350 injured, according to news agency Interfax, reporting from the Kazakh capital Nur-Sultan. One of the officers was decapitated, the news agency said, citing reports from Kazakh state media.
  • The protests began on Sunday in Kazakhstan’s western Mangistau region after the government lifted caps on prices for liquefied petroleum gas, the main fuel for cars, causing prices to double.
  • On Wednesday, the Collective Security Treaty Organization, a Russian-led intergovernmental military alliance, said its troops had been sent to Kazakhstan for a limited time “to stabilize and normalize the situation.”

German industrial orders bounce back on strong foreign demand – Reuters, 1/6/2022

  • Higher demand from abroad drove a bigger-than-expected rebound in German industrial orders in November, in rare good news for manufacturers suffering from supply bottlenecks and labor shortages in Europe’s largest economy.
  • Goods orders rose 3.7% on the month in seasonally adjusted terms after a revised drop of 5.8% in October, figures from the Federal Statistics Office showed on Thursday. A Reuters poll of analysts had pointed to a 2.1% rise.
  • The rise was driven by a surge in foreign demand for capital and intermediate goods, with orders from other euro zone countries jumping 13.1% and bookings from clients outside the single currency bloc up 5%.
  • In contrast to previous months, orders for large-ticket items such as planes did not have a big impact on the headline figure in November. Excluding this special factor, industrial orders rose 3.8% on the month, the ministry said.

Honda China JV announces 120,000 units-a-year EV factory – Reuters, 1/6/2022

  • Honda Motor and its Chinese joint venture partner Dongfeng Motor said on Thursday they would build a new factory in Wuhan to exclusively manufacture electric vehicles (EVs) from 2024.
  • The factory would have a production capacity of 120,000 vehicles a year, Honda said in a statement.
  • Honda, Japan’s second-largest automaker, is set to launch a new EV brand in China this year called e:N Series with plans to roll out 10 models with partners Dongfeng and GAC.

North Korea Says It Tested Hypersonic Missile – Wall Street Journal, 1/6/2022

  • North Korea said it hit a target with a hypersonic missile, as the country seeks to put itself in the small club of countries developing the technology.
  • Pyongyang made that claim in state media on Thursday a day after the launch, which was its first weapons test since October.
  • Hypersonic weapons are some of the latest technology being developed by the U.S., China and Russia. Hypersonic missiles fly at least five times the speed of sound and closer to the Earth than ballistic missiles, making them difficult to detect on radar.
  • Japanese and South Korean officials had described the missile on Wednesday as a suspected ballistic missile. However, photos released by North Korean state media on Thursday matched a model the country put on display at an event in October, which weapons experts have identified as a liquid-fueled maneuvering re-entry vehicle, one of North Korea’s hypersonic models.
  • The launch Wednesday would be the second test by North Korea of hypersonic technology, after one in September.

Factmonster – TODAY in HISTORY

  • King Henry VIII of England married his 4th wife, Anne of Cleves. (1540)
  • Samuel Morse gave the first public demonstration of the telegraph. (1838)
  • Former president Theodore Roosevelt died in Oyster Bay, N.Y. (1919)
  • University of California astronomers first witnessed the birth of a galaxy that contained 1 billion stars. (1987)

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