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Gradient Investments Weekly Talking Points 01/28/2022
All data is for the week ended January 28, 2022
Stocks
US large cap stocks staged a modest recovery last week from the prior week, with the S&P 500 adding 0.79% and the NASDAQ edging up 0.02%. Small and mid-cap stocks, represented by the Russell 2000, lost 0.97%. Overseas markets were down 3.61% for the international developed index (MSCI EAFE) as the emerging markets index (MSCI EM) declined 4.26%.1
Fixed Income
The Federal Reserve held interest rates steady at last week’s meeting.2 In the conference call that followed, the Fed chair did not reject the idea that the central bank could hike rates at each of its four meetings this year, speaking of the need to be nimble. He also said there was room to raise rates without hurting jobs.3
Commodities
Energy prices continued to climb on geopolitical worries for supply and the prospect will have a lighter than anticipated drag on demand. The price of West Texas crude oil rose 2.0% last week to $86.82 per barrel. Year to date, it is up 15.4%.4
Economic Data
The US economy grew at a 6.9% annual rate last quarter, well ahead of consensus expectations for 5.5% growth. This marked a dramatic acceleration from the prior quarter. For the full year, gross domestic product grew by 5.7%, the fastest pace in nearly 40 years. The fourth quarter growth was driven by increased consumer spending, a dramatic rebuilding of inventories and a sharp rise in exports. Core inflation (PCE Index) was 4.9% for the quarter and 3.3% for the full year.5
Company News6
American Express Co. (AXP), a Core Select holding, reported quarterly results that beat expectations and a plan to increase its dividend by 20%. Shares rose 11.54% for the week.7
Apple Inc. (AAPL), a Core Select and G33 holding, reported revenue and earnings growth that firmly beat expectations. Importantly, management also said that supply constraints are easing off. Shares rose 4.88%.8
Blackstone Inc. (BX), a recent addition to the G50 strategy, shares rose 13.21% after reporting revenue and earnings that expected expectations. The alternative investment management company also noted that its assets under management rose 42% compared to the previous year.9
Did you know…
NASA uses Taco Bell tortillas for space missions. Bread has too many crumbs so NASA uses tortillas for sandwiches and started making space tortillas. Taco Bell made a tortilla in the 90’s with a nine month shelf life, so NASA started using those.
Mariann Montagne, CFA
Portfolio Manager
Sources:
1 JP Morgan Weekly Market Recap 1-31-22
2 Board of Governors of the Federal Reserve System 1-26-22
3 FOMC Press Conference 1-26-22
5 Bureau of Economic Analysis 1-27-22
6 All weekly changes in company stock prices: Yahoo Finance
7 American Express press release 1-25-22
8 Apple Inc. press release 1-27-22
9 Blackstone Inc. press release 1-27-22
Advisory services are offered through American Retirement Advisors, Inc., a Registered Investment Advisor in the State of Michigan. Insurance products and services are offered through American Retirement Solutions an affiliated company. American Retirement Advisors, Inc. and American Retirement Solutions are not affiliated with or endorsed by the Social Security Administration or any government agency. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Michigan or where otherwise legally permitted. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Moreover, this material has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed.
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