Morgans AM

US equity markets climbed for a second session to close out a tough January that left the S&P500 and Nasdaq nursing their worst month since the onset of the pandemic - Dow rallied +406-points or +1.17% . Boeing Co (up +5.07%) was the top index performer after the airline won a deal with Qatar Airways worth $34B. The broader S&P500 gained +1.89%, with Consumer Discretionary (up +3.81%), Information Technology (+2.68%) and Communication Services (+2.40%) leading all eleven primary sectors higher. Tesla Inc gained +10.68% after Credit Suisse upgraded the electric vehicle maker following the recent pullback and citing robust company fundamentals. The Nasdaq jumped +3.41%. Netflix Inc jumped +11.13% (paring its January loss to -29.1%) after Citi upgraded the stock to buy from neutral, saying that the streaming service has ample pricing power to weather high inflation, and that prevailing equity values don’t reflect material subscriber growth prospects beyond 2023. Chipmaker NVIDIA Corp rallied +7.21%, paring its monthly decline to -16.7%. The small capitalisation Russell 2000 +3.05%. In merger and acquisition (M&A) news, cloud-computing company Citrix Systems Inc (down -3.42%) confirmed weekend press speculation that Elliott Management Corp.’s private-equity arm, Evergreen Coast Capital, and Vista Equity Partners would acquire the company for US$16.5B.

US equity markets rebounded sharply to cap a volatile week that saw investors grapple with the latest monetary pronouncements from the Federal Reserve and geopolitical tensions between Russia and Ukraine - Dow rallied +565-points or +1.65%, logging its best single session performance since 6 December after recovering from an earlier session decline of over >350-points. The broader S&P500 gained +2.43%, recovering from an earlier ~0.8% decline to record its best single session performance since June 2020 and settle ~8% below its most recent all-time peak. The Nasdaq rallied +3.13%. Apple Inc jumped +6.98%, recording its best single session percentage gain since July 31, 2020 after posting its largest single quarter in terms of revenue ever after the close of last Thursday’s (27 January) session, with sales growing over >11% to US$123.9B (versus consensus US$119B) despite supply challenges and the lingering effects of the pandemic. The small capitalisation Russell 2000 gained +1.93%. In merger and acquisition (M&A) news, there were reports over the weekend that cloud-computing company Citrix Systems Inc is close to a deal to be taken private, with Elliott Management Corp.’s private-equity arm, Evergreen Coast Capital, and Vista Equity Partners nearing an agreement to pay US$104 per share ~$13B.

US equity markets logged modest losses following another volatile session that saw the benchmark indices relinquish earlier gains - Dow dipped -7-points or +0.02% after trading more than >600-points higher earlier in the session. The broader S&P500 -0.54% to 4,326.51, settling just above 4,316.905, the level below which would see the index fall into official correction territory (or a fall of at least 10% from its record closing high of ). The Consumer Discretionary sector dropped -2.27% to lead five of the eleven primary sectors lower. Energy sat atop the primary sector leaderboard with a +1.24% gain. The Nasdaq -1.40% to 13,352.78, with the technology centric index on track pace for its longest weekly losing streak since November 2012. The Nasdaq is ~17.6% below its 19 November, 2021 record peak of 16,212.23. Netflix Inc (up +7.51%) continued to climb following confirmation after the close of Wednesday’s (26 January) session that Pershing Square’s Bill Ackman said his firm “recently” purchased more than 3.1M shares in the streaming giant, making it a top-20 holder of the stock. The small capitalisation Russell 2000 -2.29% at 1,931.29, ~21% below its record close of 2,442.74 set on 8 November, 2021 and marking the indice’s first bear market since 9 March, 2020. The latest pullback has the Dow, S&P 500 and Russell 2000 on pace for their worst months since March 2020, while the Nasdaq was sliding closer to its worst month since October 2008.

Another whipsaw session for US equity markets as investors digested the latest monetary policy pronouncements from the Federal Reserve and the latest round of corporate earnings releases - Dow down -130-points or -0.38%, unwinding an earlier rally of over >500-points. The broader S&P500 slipped -0.15%. The Nasdaq eked out a +0.02% gain, with Microsoft Corp rising +2.85% following their solid fourth quarter result after the closing bell of Tuesday’s (25 January) session. Netflix Inc rose over >3.5% in after hours trading (following a -1.83% fall in the regular session) after Pershing Square’s Bill Ackman said his firm “recently” purchased more than 3.1M shares in the streaming giant, making it a top-20 holder of the stock. The small capitalisation Russell 2000 lost -1.38%.

US equity markets staged an impressive intra-session comeback overnight albeit there was no specific catalyst for the intraday turnaround - Dow up +99-points or +0.29%, logging its first advance in seven sessions and roaring back from an earlier -1,115 point or -3.25% tumble. It marked the biggest intra-day reversal for the Dow since the wild trading of March 2020. The broader S&P500 added +0.28% to 4,410.13 after falling ~4% and into official correction territory (down over >10% from its 3 January record closing high of 4,796.56) earlier in the session. The index staged its sharpest snapback after being down to end positive since 23 October, 2008. 17 stocks in the S&P500 recorded intra-day price swings of at least 10%, including Moderna Inc (down -1.7%) and Nvidia Corp (-0.01%). Consumer Discretionary rose +1.21% to lead eight if of the eleven primary sectors higher. Utilities (down -1.09%) brought up the rear. The S&P500 is still down -7.47% in January and on pace for its worst monthly performance since March 2020. The technology-centric Nasdaq settled +0.63% higher, snapping a four session losing streak and recovering from an earlier slump of as much as -4.9%. The session marked the first time since the aftermath of the financial crisis in 2008 that the Nasdaq Composite had been down more than >4% intraday and closed up. Netflix Inc (down -2.60%) continued to slide after reporting slowing subscriber growth after the close of last Thursday’s (20 January) session. The small capitalisation Russell 2000 rallied +2.29%. Kohl’s Corp soared +36.02% after the department store retailer confirmed that it had received buyout offer. The Wall Street Journal had reported over the weekend that a consortium backed by activist hedge fund Starboard Value LP has offered ~US$9B (or US$64 per share) to buy the department store chain.

US equity markets retreated on Friday (21 January), with the selling once again intensifying into the close of the session and with technology stocks under fresh selling pressure - Dow down -450-points or -1.30% . The broader S&P500 -1.89% to sit ~8.7% below its 4 January intra-day peak (4,818.62), with Communication Services (down -3.88%) and Consumer Discretionary (-3.10%) falling over >3% to lead nine of the eleven primary sectors lower. Consumer Staples (up +0.02%) was the only primary sector to advance. The Nasdaq dropped -2.72% to 13,768.92. The technology-centric index is down ~15% from its record close on 19 November (16,017.23), nearing the 20% decline from a recent peak that would meet the commonly used definition for a bear market. Netflix Inc slumped -21.79% after reporting slowing subscriber growth after the close of last Thursday’s (20 January) session. Walt Disney Co, with its Disney+ and Hulu services, fell -6.94% and streaming-device maker Roku Inc -9.10%. The small capitalisation Russell 2000 lost -1.78%.

US equity markets sold off in the final hour of trading, once again relinquishing an earlier rally - Dow down -313-points or -0.89%, falling for a fifth straight session having climbed over >400-points earlier in the day. The 30-stock average closed below its 200-day moving average for the first time since December 2021. The broader S&P500 -1.10% to 4,482.73, settling below 4,500 for the first time since October last year after relinquishing an earlier +1.53% rally. Consumer Discretionary (down -1.94%), Materials (-1.49%), Information Technology (-1.33%), Industrials (-1.10%) and Communication Services (-1.14%) all dropped over >1% to lead ten of the eleven primary sectors lower. The Utilities sector (up +0.14%) was the only primary sector to advance. The Nasdaq -1.30%, giving up an earlier rally of as much as +2.1% and pushing further into official correction territory. The small capitalisation Russell 2000 -1.88%. Peloton Interactive Inc slumped -23.93% to US$24.22 per share after the stationary bike maker announced it will temporarily halt production of its bikes and treadmills due to waning demand as it tries to control costs. The news saw the stock drop below its September 2019 initial public offer price of US$29 per share. The stock hit an all-time intraday high of US$171.09 on 14 January of last year.

US equity markets relinquished earlier session gains to settle lower, with technology stocks under fresh pressure despite some respite from rising US Treasury yields - Dow down -340-points or -0.96%, with economic bellwether Caterpillar Inc (down -3.10%) and Boeing Co (-3.52%) among the key drags on the index. Goldman Sachs Group Inc fell a further -2.0% (following a -6.97% drop in the previous session) after reporting a fall in fourth-quarter profit due to weak trading activity a day earlier. The broader S&P500 shed -0.97%, with Consumer Discretionary (down 1.81%), Financials (-1.65%), Information Technology (-1.37%), Real Estate (1.21%) and Industrials (-1.10%) all dropping over >1% to lead nine of the eleven primary sectors lower. The more defensive Consumer Staples (up +0.68%) and Utilities (+0.46%) sectors were the only primary sectors to close higher, The Nasdaq lost -1.15% to settle ~10.7% below its most recent record closing high in November 2021 and hence pushing the technology centric index into official correction territory. It marked the Nasdaq’s first close in correction territory since March last year and its 66th correction since 1971. The small capitalisation Russell 2000 fell -1.49% to a 52-week low of 2,062.78.

US equity markets returned from the holiday long weekend on the backfoot, with technology stocks under renewed pressure amid a fresh climb in bond yields - Dow dropped -543-points or -1.51% . The broader S&P500 shed -1.84%, with Information Technology (down -2.49%) and Financials (-2.30%) both down over >2% and leading nine of the eleven primary sectors lower. Energy (up +0.40%) was the only primary sector to advance, tracking the latest gains on crude markets. Ford Motor Co edged higher in extended trading (after a -3.22% decline in the regular session) after it said it has realized a US$8.2B gain in the fourth quarter related to its investments in Rivian Automotive Inc (down -8.49%) following the electric-vehicle maker’s November initial public offering. The Nasdaq tumbled -2.60% to 14,506.90, hitting its lowest level in three months. The technology-centric index sits more than >10% from its most recent high and closed below its 200-day moving average for the first time since April 2020. Meta Platforms Inc fell -4.14% and Amazon.com Inc -1.99%. The small capitalisation Russell 2000 dropped -3.06%. In merger and acquisition (M&A) news, Microsoft Corp fell -2.4% after announcing the software giant will buy video game company Activision Blizzard (up +25.88%) in an all-cash transaction (US$95 per share) valued at US$68.7B.

European bourses climbed, with the media sector (up +1.9%) leading the pan-European Stoxx 600 index (which includes UK equities) +0.70% higher. Germany's DAX added +0.32%. France's CAC gained +0.82%. In broader stock moves, Credit Suisse Group AG fell -2.26% after the Swiss investment bank announced on Sunday (16 January) that Chairman António Horta-Osório had resigned following a board investigation into his travel and personal conduct. Mr Horta-Osório joined the Credit Suisse board less than a year ago In economic data, the ZEW Economic Sentiment Index for the eurozone/Germany for January is released tonight AEST.