30%
Nucor (NUE): The steelmaker rallied following a strong quarterly report in late January. It’s benefiting from rising prices and strong metal demand. NUE is the only steelmaker in the S&P 500.
Big Movers in February 2022
34%
SolarEdge (SEDG): The green-energy stock gained early in the month thanks to strong guidance and bullish results from rival Enphase Energy (ENPH). It rallied again late in February as soaring oil prices drove interest in alternate sources of energy.
31%
Mosaic (MOS): The fertiliser stock rallied after Russia’s invasion of Ukraine and subsequent sanctions squeezed global supplies.
35%
PayPal (PYPL): Weak guidance weighed on the payments company for the third straight quarter. Earnings and revenue also missed estimates as pandemic-fueled growth slowed. PYPL has lost more than 60 percent of its value since the summer.
57%
EPAM (EPAM): The software-development company plunged because of its large exposure to Eastern Europe. Management withdrew guidance on 28 February despite a strong quarterly report earlier in the month.
33%
Meta Platforms (FB): The social-media company formerly known as Facebook reported its first-ever decline in daily active users. It’s also struggling to adapt to privacy changes with the iOS operating system. Investors must now wait and hope that CEO Jeff Zuckerberg can engineer a major shift to virtual reality and the Metaverse.
Key Economic Events Last Month
 | Strong Job Growth | January’s non-farm payrolls growth was more than triple the forecast amount. The previous two months were also revised higher by 709,000 jobs as wages rose and workforce participation increased. (4/2) |
|---|---|---|
 | Fed Official Seeks Quicker Rate Hikes | James Bullard, President of the St. Louis Federal Reserve, said interest rates should rise by a full percentage point over the next three meetings. That would potentially imply a 50-basis point hike on March 16. Bullard, a voting member of the Federal Open Market Committee, cited rising inflation. (10/2) |
| Consumer Sentiment Plunges | The University of Michigan’s Consumer Sentiment Index unexpectedly fell to 61.7, its lowest reading since October 2011. The drop resulted from wealthy households feeling less optimistic amid a pullback in the stock market. The reading was later revised up to 62.8. (11/2) |
| Durable Goods, Personal Spending | Orders for durable goods, including items like appliances and machinery, rose 1.6 percent in January. It was twice the forecast amount as pandemic-related shortages fueled demand. December’s reading was also revised sharply higher. Another report showed better-than-expected growth in personal spending. (25/2) |
Key Futures Contracts
| Product Name | Current Month | Expiration | Next Month | 1-Mon% |
|---|---|---|---|---|
| S&P 500 E-Mini (@ES) | ESH22(March) | 18 Mar 22 | ESM22(June) | -3% |
| *S&P 500 E-Mini Micro (@MES) | MESH22 (March) | 18 Mar 22 | MESM22 (June) | -3% |
| Nasdaq-100 E-Mini (@NQ) | NQH22 (March) | 18 Mar 22 | NQM22 (June) | -4.6% |
| *Nasdaq-100 E-Mini Micro (@MNQ) | MNQH22 (March) | 18 Mar 22 | MNQM22 (June) | -4.6% |
| Dow Jones E-Mini (@YM) | YMH22 (March) | 18 Mar 22 | YMM22 (June) | -3.3% |
| *Dow Jones E-Mini Micro (@MYM) | MYMH22 (March) | 18 Mar 22 | MYMM22 (June) | -3.3% |
* Micro contracts are one-tenth the size of standard e-minis.
Events to Watch This Month
| Date | Event | What to watch |
|---|---|---|
| Wed, 2-Mar | Jerome Powell in Congress | Guidance on monetary policy during two days of testimony before U.S. lawmakers |
| Fri, 4-Mar | Non-farm Payrolls | Job growth, wages, labor-force participation |
| Thu, 10-Mar | Consumer Price Index (CPI) | Does inflation moderate? |
| Thu, 10-Mar | Retail Sales, Fed meeting | Consumer-spending trends, guidance on monetary policy |
| Fri, 18-Mar | Quadruple Witching | Stock options, futures, stock-index options and futures options expire, typically driving heavy volumes. |
Sector Watch
Energy7%
Health Care1%
Industrials1%
Materials1%
Consumer Staples1%
Financials1%
S&P 5003%
Utilities2%
Real Estate5%
Consumer Discretionary4%
Technology5%
Communications7%
Energy stocks advanced as geopolitical tensions pushed crude oil to an eight-year high.
Communication stocks led to the downside for a second straight month. The selloff in Meta Platforms accounted for much of the drop.
Technology stocks remained under pressure as interest rates increased. PayPal’s sharp decline also weighed on the sector.
Real Estate stocks tumbled as interest rates increased.
Noteworthy Calls & Predictions
16-February
Bank of America technical analyst Stephen Suttmeier: S&P 500 may be forming a head & shoulders. The potentially bearish reversal pattern could imply a drop toward 3,800, which would also be consistent with pullbacks in midterm-election years.
S&P 500
18-February
JPMorgan quantitative strategist Khuram Chaudhry: Slower increases of earnings estimates suggest weakening fundamental backdrop.
Technology
22-February
Bloomberg News: Heavy short interest and put buying suggest institutional investors are well hedged against downside in the S&P 500. That cautious sentiment may limit further weakness in the broader market.
S&P 500
24-February
Wedbush Securities analyst Dan Ives: Worries about Russian cyberattacks could fuel demand for security software.
Technology
28-February
Goldman Sachs economist Jan Hatzius: Inflationary expectations have become established as the job market remains strong. Personal Consumption Expenditures (PCE) index is now expected to rise 3.7 percent in 2022, up from an earlier forecast of 3.1 percent.
Inflation
Disclosure
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