In his Daily Market Notes report to investors, while commenting on earnings, Louis Navellier wrote:
Weak April
This morning, stocks have opened modestly in the red with crude oil rising above $107, gold bouncing above $1,900, and interest rates on the rise again in front of next week’s Fed meeting where a 50bps increase in Fed Funds is almost assured.
Q1 2022 hedge fund letters, conferences and more
Inflation remains the central issue as it is forcing central banks around the world to raise rates. In the US, the core personal consumption expenditures data rose 5.2% in March y-o-y, slightly below February's 5.2% giving hope that inflation may have peaked.
Equities had one of the best relief rallies in many months yesterday with the NASDAQ up over 3%, the S&P +2.5%, the Dow up 1.8%, and the Russell +1.8%. Volatility remains extremely high; the S&P has gained or lost 2% or more in a day 32 times in 2002, compared to 24 such days in 2021.
Earnings At The Helm
Tech names got a huge boost from a positive surprise of subscriber growth and profits at Meta Platforms (NASDAQ:FB) which shot up 18% albeit still down over 35% in the last 12 months. Nevertheless, April is set to be the weakest month for the S&P since March of 2020 and the NASDAQ worst since 2008.
Earnings continue to steer the boat.
After the close, Amazon (NASDAQ:AMZN) reported the weakest sales growth in years and is down 12%, the textbook example of a company that benefited hugely from the pandemic lockdowns with lower growth prospects post-pandemic.
Apple also reported strong results but warned that supply chain disruptions due to the China Covid lockdowns will hit revenues between $4-$8 billion in 2Q.
Absorbing High Prices
Investor outflows continue despite yesterday's gains, due to the high volatility and uncertainties of the impact of the impending quantitative tightening by the Fed. Energy prices remain poised to rise due to supply concerns as do wages due to the tight job market.
Stocks remain the best asset class to achieve returns above the higher rates of inflation as earnings growth forecasts continue to be strong on the back of a very flush consumer, with pent-up demand able to absorb higher prices. The continuing volatility will present buying opportunities on pullbacks.
Coffee Beans
Asian ports have grown at a fast rate in recent years. In 2005, there were still two European (Hamburg and Rotterdam) and one North American (Los Angeles) port in the ranking of the biggest shipping hubs in the world. In 2021, only Rotterdam remained in the top 10 – in the bottom rank. Source: Statista
