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U.S. stocks are poised to rise on Monday ahead of a week of earnings and economic data releases, including quarterly reports from Tesla, Netflix, and .
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U.S. stocks end higher after blockbuster September jobs report as S&P 500 snaps 4-week losing streak
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U.S. stocks closed higher Friday, with the S&P 500 eking out a modest weekly gain, as investors assessed a monthly jobs report that showed both a blockbuster surge in jobs created along with a slowdown in wage pressures.
How stock indexes traded
-
The Dow Jones Industrial Average
DJIA
rose 288.01 points, or 0.9%, to close at 33,407.58. -
The S&P 500
SPX
gained 50.31 points, or 1.2%, to finish at 4,308.50. -
The Nasdaq Composite
COMP
climbed 211.51 points, or 1.6%, to end at 13,431.34.
For the week, the Dow slipped 0.3% while the S&P 500 edged up 0.5% and the Nasdaq gained 1.6%. The Dow fell for a third straight week, while the S&P 500 snapped a four-week losing streak and the Nasdaq saw back-to-back weekly gains, according to Dow Jones Market Data.
What drove markets
U.S. stocks climbed Friday, after reversing course from their slide earlier in the session as investors parsed a U.S. employment report that was stronger than forecast.
“Wages slowed down,” said José Torres, senior economist at Interactive Brokers, in a phone interview Friday. “That was a great development” as the Federal Reserve aims to bring down inflation through monetary tightening.
Investors have worried that a hot labor market will keep wage growth elevated, adding to inflationary pressures that could see the Fed keep interest rates higher for longer or potentially hike its benchmark rate one more time this year.
A report Friday from the Bureau of Labor Statistics showed the U.S. economy created 336,000 jobs in September, far surpassing economists’ expectations for 170,000 new jobs. Also, the report said job gains in August and July were revised higher.
See: Jobs report shows big 336,000 gain in hiring in September. Labor market still hot.
But other details from the report were slightly more favorable in terms of monetary policy concerns.
For example, average hourly wages rose a mild 0.2% in September, bringing the 12-month rate of change through September to 4.2%, a slower pace than the prior month’s year-over-year rate of 4.3%.
“Even though the headline number was 2.5 times what Wall Street had anticipated, the more important detail below the surface was that wage inflation actually cooled,” said Sam Stovall, chief investment strategist at CFRA, during a phone interview with MarketWatch.
Renaissance Macro Research’s Neil Dutta said in a note that the jobs report was consistent with a soft landing for the economy and the Fed’s objective to lower the inflation rate back to 2%.
“The strong labor market gives credence to the base case still being a soft landing,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management, in a phone interview Friday. But that soft-landing narrative is “somewhat fragile and data dependent,” he said.
See: U.S. stocks stage a surprising rally on Friday. But can the party last?
Investors will be watching for data scheduled to be released next week on September inflation from the consumer-price index and producer-price index.
Meanwhile, economists from Goldman Sachs Group said in a note Friday that “the continued rebalancing of the labor market” is consistent with their expectation that the Fed is done raising rates this year, despite senior Fed officials projecting another hike in their latest batch of forecasts, released last month.
Federal-funds-futures traders are expecting the Fed will keep its benchmark rate at the current range of 5.25% to 5.5% at its policy meetings in November and December, according to the CME FedWatch Tool.
“I’m of the belief that the Fed will not hike again this year,” BMO’s Ma said. “I don’t think it needs to.”
Meanwhile, the yield on the 10-year Treasury note
BX:TMUBMUSD10Y
climbed 6.8 basis points to 4.783%, rising for five straight weeks, according to Dow Jones Market Data.Rising Treasury yields, particularly on the long end of the yield curve, have been blamed for a selloff in stocks over the past couple months. But the S&P 500 is now up so far in October, with a small gain of 0.5%, according to FactSet data.
Companies in focus
-
Pioneer Natural Resources Co.
PXD,
+10.45%
shares jumped 10.5% following a report in The Wall Street Journal that Exxon Mobil is closing in on a deal to buy the Texan shale driller for about $60 billion. Exxon Mobil
XOM,
-1.67%
shares declined 1.7% on the news. -
Levi Strauss & Co.
LEVI,
-0.83%
shares fell 0.8% after the retailer late Thursday cut its outlook for the full year and its executives noted a “continued softness in the wholesale channel, primarily in the U.S.” -
Tesla
TSLA,
+0.18%
edged up 0.2% after the automobile maker cut the price of its Model 3 cars from $40,240 to $38,990 and dropped the cost of its model Y electric vehicles from $50,990 to $45,990 in the U.S. -
Koninklijke Philips‘
PHG,
-7.20%
shares dropped 7.2% after the U.S. Food and Drug Administration called for more testing of its recalled sleep and respiratory devices, following concerns about foam used in millions of recalled products.
Steve Goldstein contributed to this report.
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The Dow Jones Industrial Average
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These 20 stocks in the S&P 500 are expected to soar after rising interest rates have pushed down valuations
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Two things investors can be sure about: Nothing lasts forever and the stock market always overreacts. The spiking of yields on long-term U.S. Treasury securities has been breathtaking, and it has led to remarkable declines for some sectors and possible bargains for contrarian investors who can commit for the long term.
First we will show how the sectors of the S&P 500
have performed. Then we will look at price-to-earnings valuations for the sectors and compare them to long-term averages. Then we will screen the entire index for companies trading below their long-term forward P/E valuation averages and narrow the list to companies most favored by analysts.Here are total returns, with dividends reinvested, for the 11 sectors of the S&P 500, with broad indexes below. The sectors are sorted by ascending total returns this year through Monday.
Sector or index 2023 return 2022 return Return since end of 2021 1 week return 1 month return Utilities -18.4% 1.6% -17.2% -11.1% -9.6% Real Estate -7.1% -26.1% -31.4% -3.0% -8.8% Consumer Staples -5.4% -0.6% -6.0% -2.2% -4.4% Healthcare -4.2% -2.0% -6.1% -1.7% -3.3% Financials -2.5% -10.5% -12.7% -2.5% -4.7% Materials 1.3% -12.3% -11.2% -1.9% -7.0% Industrials 3.5% -5.5% -2.1% -1.8% -7.3% Energy 4.0% 65.7% 72.4% -1.9% -1.4% Consumer Discretionary 27.0% -37.0% -20.0% -0.6% -5.2% Information Technology 36.5% -28.2% -2.0% 0.8% -5.9% Communication Services 42.5% -39.9% -14.3% 1.1% -1.3% S&P 500
13.1% -18.1% -7.4% -1.1% -4.9% DJ Industrial Average
2.5% -6.9% -4.5% -1.7% -4.0% Nasdaq Composite Index
COMP28.0% -32.5% -13.7% 0.3% -5.1% Nasdaq-100 Index
36.5% -32.4% -7.7% 0.5% -4.2% Source: FactSet Returns for 2022 are also included, along with those since the end of 2021. Last year’s weakest sector, communications services, has been this year’s strongest performer. This sector includes Alphabet Inc.
GOOGL
and Meta Platforms Inc.
META,
which have returned 52% and 155% this year, respectively, but are still down since the end of 2021. To the right are returns for the past week and month through Monday.On Monday, the S&P 500 Utilities sector had its worst one-day performance since 2020, with a 4.7% decline. Investors were reacting to the jump in long-term interest rates.
Here is a link to the U.S. Treasury Department’s summary of the daily yield curve across maturities for Treasury securities.
The yield on 10-year U.S. Treasury notes
jumped 10 basis points in only one day to 4.69% on Monday. A month earlier the 10-year yield was only 4.27%. Also on Monday, the yield on 20-year Treasury bonds
rose to 5.00% from 4.92% on Friday. It was up from 4.56% a month earlier.Market Extra: Bond investors feel the heat as popular fixed-income ETF suffers lowest close since 2007
The Treasury yield curve is still inverted, with 3-month T-bills
yielding 5.62% on Monday, but that was up only slightly from a month earlier. An inverted yield curve has traditionally signaled that bond investors expect a recession within a year and a lowering of interest rates by the Federal Reserve. Demand for bonds pushes their prices down. But the reverse has happened over recent days, with the selling of longer-term Treasury securities pushing yields up rapidly.Another way to illustrate the phenomenon is to look at how the Federal Reserve has shifted the U.S. money supply. Odeon Capital analyst Dick Bove wrote in a note to clients on Friday that “the Federal Reserve has not deviated from its policy to defeat inflation by tightening monetary policy,” as it has shrunk its balance sheet (mostly Treasury securities) to $8.1 trillion from $9 trillion in March 2022. He added: “The M2 money supply was $21.8 trillion in March 2022; today it is $20.8 trillion. You cannot get tighter than these numbers indicate.”
Then on Tuesday, Bove illustrated the Fed’s tightening and the movement of the 10-year yield with two charts:
Odeon Capital Group, Bloomberg
Bove said he believes the bond market has gotten it wrong, with the inverted yield curve reflecting expectations of rate cuts next year. If he is correct, investors can expect longer-term yields to keep shooting up and a normalization of the yield curve.
This has set up a brutal environment for utility stocks, which are typically desired by investors who are seeking dividend income. In a market in which you can receive a yield of 5.5% with little risk over the short term, and in which you can lock in a long-term yield of about 5%, why take a risk in the stock market? And if you believe that the core inflation rate of 3.7% makes a 5% yield seem paltry, keep in mind that not all investors think the same way. Many worry less about the inflation rate because large components of official inflation calculations, such as home prices and car prices, don’t affect everyone every year.
We cannot know when this current selloff of longer-term bonds will end, or how much of an effect it will have on the stock market. But sharp declines in the stock market can set up attractive price points for investors looking to go in for the long haul.
Screening for lower valuations and high ratings
A combination of rising earnings estimates and price declines could shed light on potential buying opportunities, based on forward price-to-earnings ratios.
Let’s look at the sectors again, in the same order, this time to show their forward P/E ratios, based on weighted rolling 12-month consensus estimates for earnings per share among analysts polled by FactSet:
There is a limit to how many columns we can show in the table. The S&P 500’s forward P/E ratio is now 17.94, compared with 16.79 at the end of 2022 and 21.53 at the end of 2021. The benchmark index’s P/E is above its 10- and 15-year average levels but below the five-year average.
If we compare the current sector P/E numbers to 5-, 10- and 15-year averages, we can see that the current levels are below all three averages for four sectors: utilities, real estate, financials and communications services. The first three face obvious difficulties as they adjust to the rising-rate environment, while the real-estate sector reels from continuing low usage rates for office buildings, from the change in behavior brought about by the COVID-19 pandemic.
Your own opinions, along with the pricing for some sectors, might drive some investment choices.
A broader screen of the S&P 500 might point to companies for you to research further.
We narrowed the S&P 500 as follows:
- Current forward P/E below 5-, 10- and 15-year average valuations. For stocks with negative earnings-per-share estimates for the next 12 months, there is no forward P/E ratio so they were excluded. For stocks listed for less than 15 years, we required at least a 5-year average P/E for comparison. This brought the list down to 138 companies.
- “Buy” or equivalent ratings from at least two-thirds of analysts: 41 companies.
Here are the 20 companies that passed the screen, for which analysts’ price targets imply the highest upside potential over the next 12 months.
There is too much data for one table, so first we will show the P/E information:
Company Ticker Current P/E to 5-year average Current P/E to 10-year average Current P/E to 15-year average SolarEdge Technologies Inc. SEDG 89% N/A N/A AES Corp. AES 66% 75% 90% Insulet Corp. PODD 18% N/A N/A United Airlines Holdings Inc. UAL 42% 50% N/A Alaska Air Group Inc. ALK 51% 57% N/A Tapestry Inc. TPR 39% 49% 70% Albemarle Corp. ALB 39% 50% 73% Delta Air Lines Inc. DAL 60% 63% 21% Alexandria Real Estate Equities Inc. ARE 59% 68% N/A Las Vegas Sands Corp. LVS 96% 78% 53% Paycom Software Inc. PAYC 61% N/A N/A PayPal Holdings Inc. PYPL 33% N/A N/A SBA Communications Corp. Class A SBAC 27% N/A N/A Advanced Micro Devices Inc. AMD 58% 39% N/A LKQ Corp. LKQ 92% 44% 78% Charles Schwab Corp. SCHW 75% 54% 73% PulteGroup Inc. PHM 94% 47% N/A Lamb Weston Holdings Inc. LW 71% N/A N/A News Corp Class A NWSA 93% 73% N/A CVS Health Corp. CVS 75% 61% 67% Source: FactSet Click on the tickers for more about each company or index.
News Corp
NWSA
is on the list. The company owns Dow Jones, which in turn owns MarketWatch.Here’s the list again, with ratings and consensus price-target information:
Company Ticker Share “buy” ratings Oct. 2 price Consensus price target Implied 12-month upside potential SolarEdge Technologies Inc. SEDG 74% $122.56 $268.77 119% AES Corp. AES 79% $14.16 $25.60 81% Insulet Corp. PODD 68% $165.04 $279.00 69% United Airlines Holdings Inc. UAL 71% $41.62 $69.52 67% Alaska Air Group Inc. ALK 87% $36.83 $61.31 66% Tapestry Inc. TPR 75% $28.58 $46.21 62% Albemarle Corp. ALB 81% $162.41 $259.95 60% Delta Air Lines Inc. DAL 95% $36.45 $58.11 59% Alexandria Real Estate Equities Inc. ARE 100% $98.18 $149.45 52% Las Vegas Sands Corp. LVS 72% $45.70 $68.15 49% Paycom Software Inc. PAYC 77% $260.04 $384.89 48% PayPal Holdings Inc. PYPL 69% $58.56 $86.38 48% SBA Communications Corp. Class A SBAC 68% $198.24 $276.69 40% Advanced Micro Devices Inc. AMD 74% $103.27 $143.07 39% LKQ Corp. LKQ 82% $49.13 $67.13 37% Charles Schwab Corp. SCHW 77% $53.55 $72.67 36% PulteGroup Inc. PHM 81% $73.22 $98.60 35% Lamb Weston Holdings Inc. LW 100% $92.23 $123.50 34% News Corp Class A NWSA 78% $20.00 $26.42 32% CVS Health Corp. CVS 77% $69.69 $90.88 30% Source: FactSet A year may actually be a short period for a long-term investor, but 12-month price targets are the norm for analysts working for brokerage companies.
Don’t miss: This fund shows that industry expertise can help you make a lot of money in the stock market
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Stock Plays for October: 3 to Watch, According to J.P. Morgan
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The stock market is entering October a little battered and bruised after September’s selloff. However, that also offers opportunities and
J.P. Morgan
analysts have some ideas for where to invest at the start of t…[ad_2]
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Hotel housekeeping jobs have fallen by 102,000 during the pandemic. What happened?
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As some U.S. hotels hung on to practices they adopted during the early stages of the coronavirus pandemic — such as eliminating daily room cleanings — the number of hotel housekeepers fell by more than 102,000 last year from prepandemic levels, new data show.
The total number of hotel housekeeping jobs as of May 2022 was 364,990, a 22% decline from the total of 467,270 such positions during the same period in 2019, according to numbers released last week by the Bureau of Labor Statistics.
Unions…
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These 20 stocks led the January rally
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The initial version of this story had incorrect price changes for 2023. It is now updated with information as of the market close on Jan. 31.
Investors staged a January rally, with solid gains for the S&P 500 and an even better showing for technology stocks that led the dismal downward action in 2022.
This…
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Tesla, GM, Lucid, Alibaba, and More Stock Market Movers
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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/stock-market-movers-tesla-alibaba-gm-lucid-51674835133
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Philips says it will cut 6,000 extra jobs by 2025 as it swings to a loss
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Royal Philips NV on Monday said it will cut an extra 6,000 jobs by 2025, including around 3,000 this year, as part of a plan to improve performance and drive value creation.
The Dutch health-technology company
PHIA,
+0.57% PHG,
+0.59%
–which said in October that it was cutting 4,000 jobs, or about 5% of its 80,000-strong workforce–said Monday that the simplified operating model will make it more agile and competitive, while reducing costs. The job cuts announced Monday are in addition to those outlined in October.Philips said that it will now focus on extracting the full value of its portfolio through a strategy of focused organic growth.
The company made the disclosure as it reported a swing to net loss for the fourth quarter of last year amid higher costs, but said that it has seen some improvement in the period and that is taking actions to address operational challenges in an uncertain environment.
The Dutch health-technology company–which sells products including MRI scanners and ultrasound machines–posted a net loss attributable to shareholders of 106 million euros ($170.6 million) compared with a profit of EUR157 million for the fourth quarter of 2021 and a company-compiled consensus loss of EUR16 million.
Adjusted earnings before interest, taxes and amortization–which strips out exceptional and other one-off items–was EUR651 million compared with EUR647 million and a consensus of EUR428 million.
The company said its performance was hit by cost inflation that was partly offset by pricing and productivity measures.
Group sales in the period were EUR5.42 billion compared with EUR4.94 billion and a consensus of EUR5.03 billion.
Like-for-like sales were up 3%, compared with a company-compiled forecast for a fall of 5.2%, due to improved component supplies
Royal Philips said it now expects low-single-digit comparable sales growth and high-single-digit adjusted Ebita margin for this year.
It has also targeted mid-single-digit comparable sales growth and a low-teens adjusted Ebita margin by 2025, and for mid-single-digit comparable sales growth and mid-to-high-teens adjusted Ebita margin beyond 2025.
“Considering the slowing of consumer demand and a gradual improvement of the order book conversion during 2023, Philips anticipates a slow start to the year, with improvements throughout the year supported by the ongoing productivity, pricing and other actions,” it said.
Write to Ian Walker at ian.walker@wsj.com
The company said its performance was hit by cost inflation that was partly offset by pricing and productivity measures.
Group sales in the period were EUR5.42 billion compared with EUR4.94 billion and a consensus of EUR5.03 billion.
Like-for-like sales were up 3%, compared with a company-compiled forecast for a fall of 5.2%, due to improved component supplies
Royal Philips said it now expects low-single-digit comparable sales growth and high-single-digit adjusted Ebita margin for this year.
“Considering the slowing of consumer demand and a gradual improvement of the order book conversion during 2023, Philips anticipates a slow start to the year, with improvements throughout the year supported by the ongoing productivity, pricing and other actions,” it said.
Write to Ian Walker at ian.walker@wsj.com
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18 stock picks in a ‘Goldilocks’ scenario for U.S. consumers
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It may not have been a surprise to see the consumer discretionary sector of the S&P 500 get hammered last year amid talk of a looming recession while the Federal Reserve jacked up interest rates to push back against inflation.
But the stock market always looks ahead. Following a decline of 19.4% for the S&P 500
SPX,
+0.42%
in 2022 and a 37.6% drop for the benchmark index’s consumer discretionary sector, this may be the time to begin looking for bargains.And now, analysts at Jefferies have lifted the sector to a “bullish” rating.
In a note to clients on Jan. 10, Jefferies’ global equity strategist, Sean Darby, wrote: “A Goldilocks scenario might be unfolding for the U.S. consumer — falling inflation but steady employment conditions.”
He sees consumer confidence improving, in part because “households are still sitting on [about] $1.4 trillion of Covid savings.”
Darby pointed to a list of 18 consumer discretionary stocks favored by Jefferies analysts that was published on Jan. 6. Those are listed below, along with three stocks in the sector the analysts rate “underperform.”
The ratings of the Jefferies analysts for individual stocks is based on their 12-month outlooks for the companies, in keeping with Wall Street tradition.
So we have added another list further down, showing which companies in the S&P 500 consumer discretionary sector are expected by analysts polled by FactSet to increase sales the most through 2024.
The Jefferies 18
Here are the 18 consumer discretionary stocks recommended by Jefferies analysts with “buy” ratings on Jan. 6, sorted by how much upside the firm sees for the shares from closing prices on Jan. 9:
Company Ticker Jan. 9 price Jefferies price target Implied 12-month upside potential Three-year estimated sales CAGR through 2022 Two-year estimated sales CAGR through 2024 Topgolf Callaway Brands Corp. MODG,
-0.22% $20.76 $56 170% 32.8% 10.0% Bloomin’ Brands Inc. BLMN,
+3.87% $22.08 $35 59% 2.4% 3.7% Coty Inc. Class A COTY,
+1.23% $9.38 $14 49% -7.1% 3.7% MGM Resorts International MGM,
+1.71% $37.64 $56 49% -0.1% 6.6% Chewy Inc. Class A CHWY,
+1.63% $40.13 $57 42% 28.0% 10.6% Planet Fitness Inc. Class A PLNT,
+0.69% $82.36 $115 40% 10.4% 13.9% Molson Coors Beverage Co. Class B TAP,
+0.67% $50.21 $69 37% 0.5% 1.4% Fox Factory Holding Corp. FOXF,
+3.95% $99.90 $135 35% 28.1% 6.6% Hasbro Inc. HAS,
+0.99% $63.70 $85 33% 9.1% 3.6% Hostess Brands Inc. Class A TWNK,
+0.33% $23.10 $30 30% 14.2% 5.0% Lowe’s Cos. Inc. LOW,
+0.08% $199.44 $250 25% 10.6% -1.9% Walmart Inc. WMT,
-0.27% $144.95 $175 21% 4.9% 3.3% Dollar General Corp. DG,
-0.26% $241.05 $285 18% 10.9% 6.7% Church & Dwight Co. Inc. CHD,
-1.17% $82.25 $97 18% 7.0% 4.6% McDonald’s Corp. MCD,
+0.39% $267.25 $315 18% 2.4% 4.0% Estee Lauder Cos. Inc. Class A EL,
+0.39% $261.63 $304 16% 2.8% 5.8% Mondelez International Inc. Class A MDLZ,
-0.04% $67.24 $75 12% 6.3% 4.1% Tapestry Inc. TPR,
+0.73% $41.25 $45 9% 3.3% 3.2% Sources: Jefferies, FactSet Click on the tickers for more information about the companies.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
The two right-most columns on the table show estimated compound annual growth rates (CAGR) for the companies over the past three calendar years and expected sales CAGR for two years through calendar 2024, based on the companies’ financial reports and consensus estimates among analysts polled by FactSet.
(We used calendar-year numbers, some of which are estimated by FactSet for prior years, because some companies have fiscal years or even months that don’t match the calendar.)
The stock pick with the highest 12-month upside potential, based on Jefferies’ price target, is Topgolf Callaway Brands Corp.
MODG,
-0.22% .
This company has the highest estimated three-year sales CAGR on the list, and has the third-highest projected sales CAGR through 2024, after Planet Fitness Inc.
PLNT,
+0.69%
and Chewy Inc.
CHWY,
+1.63% .On Jan. 6, the Jefferies analysts also listed three stocks in the sector they rated “underperform.” Here they are, sorted by how much the analysts expect the stocks to decline over the next 12 months:
Company Ticker Jan. 9 price Jefferies price target Implied 12-month upside potential Three-year estimated sales CAGR through 2022 Two-year estimated sales CAGR through 2024 Lululemon Athletica Inc. LULU,
+2.98% $298.66 $200 -33% 26.3% 14.6% Williams-Sonoma Inc. WSM,
+1.75% $122.17 $98 -20% 14.1% -0.3% Harley-Davidson Inc. HOG,
+0.35% $43.25 $39 -10% -2.8% 4.4% Sources: Jefferies, FactSet Screen of consumer discretionary sales growth
A look head at which companies are expected to increase sales the most over the next two years might serve as a good starting point for your own research.
Bear in mind that some of the companies in travel-related industries suffered declining sales for three years through 2022 because of the coronavirus pandemic. Some of those are on this new list of 20 stocks in the S&P 500 consumer discretionary sector expected to show the highest two-year sales CAGR through calendar 2024:
Company Ticker Two-year estimated sales CAGR through 2024 Three-year estimated sales CAGR through 2022 Share “buy” ratings Jan. 9 price Consensus price target Implied 12-month upside potential Las Vegas Sands Corp. LVS,
+1.59% 59.2% -32.6% 79% $52.78 $53.53 1% Norwegian Cruise Line Holdings Ltd. NCLH,
+1.67% 39.6% -9.3% 44% $13.78 $16.96 23% Carnival Corp. CCL,
+1.64% 35.2% -14.7% 30% $9.47 $10.11 7% Tesla Inc. TSLA,
-1.83% 34.3% 49.7% 64% $119.77 $232.43 94% Wynn Resorts Ltd. WYNN,
+2.01% 29.3% -17.5% 53% $94.33 $96.07 2% Royal Caribbean Group RCL,
+2.22% 28.4% -6.8% 53% $57.29 $66.43 16% Chipotle Mexican Grill Inc. CMG,
-0.17% 13.4% 15.9% 71% $1,446.74 $1,778.81 23% Amazon.com Inc. AMZN,
+2.61% 12.2% 22.1% 92% $87.36 $133.76 53% Booking Holdings Inc. BKNG,
+0.37% 11.9% 3.9% 63% $2,208.41 $2,307.67 4% Aptiv PLC APTV,
+1.66% 11.9% 6.4% 70% $97.98 $117.23 20% Starbucks Corp. SBUX,
+1.28% 11.2% 7.2% 42% $104.74 $103.44 -1% Etsy Inc. ETSY,
+3.56% 11.1% 45.3% 50% $120.99 $124.04 3% Hilton Worldwide Holdings Inc. HLT,
+0.06% 10.1% -2.9% 38% $129.08 $146.17 13% Expedia Group Inc. EXPE,
+0.39% 9.0% -0.9% 50% $93.77 $125.65 34% NIKE Inc. Class B NKE,
+0.68% 8.1% 5.8% 62% $124.85 $126.15 1% Marriott International Inc. Class A MAR,
+0.47% 7.5% -1.2% 30% $152.53 $172.81 13% BorgWarner Inc. BWA,
+1.82% 7.1% 15.3% 53% $42.24 $46.93 11% Tractor Supply Co. TSCO,
+1.06% 6.8% 19.0% 61% $217.48 $232.34 7% Yum! Brands Inc. YUM,
-0.76% 6.7% 6.4% 47% $129.76 $137.79 6% Dollar General Corp. DG,
-0.26% 6.7% 10.9% 67% $241.05 $267.54 11% Source: FactSet Among the companies on this list that didn’t suffer sales declines from 2019 levels, Tesla Inc.
TSLA,
-1.83%
is expected to achieve the highest two-year sales CAGR through 2022.Dollar General Corp.
DG,
-0.26%
is the only company to appear on this list based on consensus sales growth estimates and the Jefferies recommended list.Don’t miss: These 15 Dividend Aristocrat stocks have been the best income builders
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These 20 stocks were the biggest losers of 2022
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This has been the year of reckoning for Big Tech stocks — even those of companies that have continued to grow sales by double digits.
Below is a list of the 20 stocks in the S&P 500
SPX,
-0.72%
that have declined the most in 2022.First, here’s how the 11 sectors of the benchmark index have performed this year:
S&P 500 sector 2022 price change Forward P/E Forward P/E as of Dec. 31, 2021 Energy 57.8% 9.6 11.1 Utilities -0.5% 18.8 20.4 Consumer Staples -2.7% 20.9 21.8 Healthcare -3.2% 17.4 17.2 Industrials -6.7% 18.0 20.8 Financials -12.1% 11.7 14.6 Materials -13.4% 15.6 16.6 Real Estate -27.7% 16.2 24.2 Information Technology -28.8% 19.6 28.1 Consumer Discretionary -37.4% 20.7 33.2 Communication Services -40.4% 14.0 20.8 S&P 500 -19.2% 16.5 21.4 Source: FactSet The energy sector has been the only one to show a gain in 2022, and it has been a whopper, even as West Texas Intermediate crude oil
CL.1,
+0.41%
has given up most of its gains from earlier in the year. Here’s why investors are still confident in the supply/demand setup for oil and energy stocks.Looking at the worst-performing sectors, you might wonder why the consumer discretionary and communication services sectors have fared worse than information-technology, the core tech sector. One reason is that S&P Dow Jones Indices can surprise investors with its sector choices. The consumer discretionary sector includes Tesla Inc.
TSLA,
+0.70%
and Amazon.com Inc.
AMZN,
-1.17% ,
which has fallen nearly 50% this year. The communications sector includes Meta Platforms Inc.
META,
-1.21% ,
along with Match Group Inc.
MTCH,
+0.50% ,
which is down 69% for 2022, and Netflix Inc.
NFLX,
-0.44% ,
which is down 52% this year.There have been many reasons easy to cite for Big Tech’s decline, such as a questionable change in strategy for Facebook’s holding company, Meta, as CEO Mark Zuckerberg has put so much of the company’s resources into developing a new world that most people don’t wish to enter, at least yet. Meta’s shares were down 64% for 2022 through Dec. 29.
You might also blame the Twitter-related antics and sales of Tesla shares by CEO Elon Musk for the 65% decline in the electric-vehicle maker’s stock this year. But Tesla had a forward price-to-earnings ratio of 120.3 at the end of 2021, while the S&P 500
SPX,
-0.72%
traded for 21.4 times its weighted forward earnings estimate, according to FactSet. Those P/E ratios have now declined to 21.7 and 16.4, respectively. So Tesla no longer appears to be a very expensive stock, especially for a company that increased its vehicle deliveries by 42% in the third quarter from a year earlier.Analysts polled by FactSet expect Tesla’s stock to double during 2023. It nearly made this list of 20 EV stocks expected to rebound the most in 2023.
The worst-performing S&P 500 stocks of 2022
Here are the 20 stocks in the S&P 500 that fell the most for 2022 through the close on Dec. 29.
Company Ticker 2022 price change Forward P/E Forward P/E as of Dec. 32, 2021 Generac Holdings Inc. GNRC,
-0.84% -71.4% 13.7 30.2 Match Group Inc. MTCH,
+0.50% -68.9% 20.1 48.5 Align Technology Inc. ALGN,
-0.52% -67.7% 27.4 48.7 Tesla Inc. TSLA,
+0.70% -65.4% 21.7 120.3 SVB Financial Group SIVB,
-0.38% -65.4% 10.8 23.0 Catalent Inc. CTLT,
-0.40% -64.6% 13.0 32.5 Meta Platforms Inc. Class A META,
-1.21% -64.2% 14.7 23.5 Signature Bank SBNY,
-0.34% -64.1% 6.2 18.6 PayPal Holdings Inc. PYPL,
-0.01% -62.6% 14.8 36.0 V.F. Corp. VFC,
+0.15% -62.5% 11.9 20.4 Warner Bros. Discovery Inc. Series A WBD,
-1.64% -59.9% N/A 7.5 Carnival Corp. CCL,
-0.23% -59.8% 38.1 N/A Stanley Black & Decker Inc. SWK,
-0.42% -59.8% 17.0 15.9 Lumen Technologies Inc. LUMN,
-1.79% -57.8% 7.7 7.8 Zebra Technologies Corp. Class A ZBRA,
-0.44% -56.7% 14.5 30.1 Dish Network Corp. Class A DISH,
-0.96% -56.5% 8.6 10.9 Caesars Entertainment Inc. CZR,
+0.24% -55.7% 51.4 144.5 Lincoln National Corp. LNC,
+0.26% -55.1% 3.4 6.2 Advanced Micro Devices Inc. AMD,
-0.97% -55.0% 17.8 43.1 Seagate Technology Holdings PLC STX,
-0.55% -53.1% 15.0 12.4 Source: FactSet Click on the tickers for more information about the companies.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
Another way of measuring the biggest stock-market losers of 2022
It is one thing to have a large decline based on the share price, but that doesn’t tell the entire story. How much of a decline have investors seen in the holdings of their shares during the year? The S&P 500’s total market capitalization declined to $31.66 trillion as of Dec. 28 (the most recent figure available) from $40.36 trillion at the end of 2021, according to FactSet.
Shareholders of these companies have suffered the largest declines in market cap during 2022.
Company Ticker 2022 market capitalization change ($bil) 2022 price change Apple Inc. AAPL,
-0.63% -$851 -27.0% Amazon.com Inc. AMZN,
-1.17% -$832 -49.5% Microsoft Corp. MSFT,
-1.15% -$728 -28.3% Tesla Inc. TSLA,
+0.70% -$677 -65.4% Meta Platforms Inc. Class A META,
-1.21% -$465 -64.2% Nvidia Corp. NVDA,
-1.37% -$376 -50.3% PayPal Holdings Inc. PYPL,
-0.01% -$141 -62.6% Netflix Inc. NFLX,
-0.44% -$138 -51.7% Walt Disney Co. DIS,
-1.62% -$123 -43.7% Salesforce Inc. CRM,
-0.96% -$118 -47.8% Source: FactSet So there is your surprise for today: Apple is this year’s biggest stock-market loser.
Don’t miss: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices
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U.S. stocks edge up despite higher-than-expected inflation data
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U.S. stock indexes edged higher on Wednesday, while hotter-than-expected producer price inflation data deepened concerns that the Federal Reserve may continue its aggressive interest rate hikes.
How are stock-index futures trading
-
The Dow Jones Industrial Average
DJIA,
+0.50%
was up 120 points, or 0.4% to around 29,355 -
The S&P 500
SPX,
+0.35%
gained 5.3 points, or 0.2% to about 3,594 -
The Nasdaq Composite
COMP,
-6.31%
traded 5.1 points, or 0.1% higher to 10,430
On Tuesday, the Dow Jones Industrial Average rose 36 points, or 0.12%, to 29239, the S&P 500 declined 24 points, or 0.65%, to 3589, and the Nasdaq Composite dropped 116 points, or 1.1%, to 10426. The S&P 500 closed down 1,177 points, or 24.7% for the year to date.
What’s driving markets
The 12-month rate of producer price inflation slowed to to 8.5% from 8.7% while the annual core rate, excluding food and energy, was unchanged at 5.6%, but the monthly rate rose 0.4% in September, above forecast, and the monthly core PPI was also up 0.4% in September.
Such data has worsened fears that to curb inflation, the Fed will continue its aggressive rate hikes, which may steer the U.S. economy into a recession.
“We believe the odds of a recession in 2023 are now better than 50%,” Greg Bassuk, chief executive at AXS Investments, wrote in a Wednesday note. “Last week’s market turbulence saw volatility at levels we have not seen since July, and we believe investors should brace for ongoing market volatility and uncertainty throughout Q4, in concert with another likely Fed interest rate hike to the tune of 0.75% in November,” according to Bassuk.
The 10-year Treasury yield BX:TMUBMUSD10Y, which started the year around 1.65% was trading at 3.931% on Wednesday, off 1.3 basis points, after the producer price inflation data.
Traders are also awaiting U.S. September consumer prices data on Thursday due at 8:30 am Eastern Time.
“Inflation has proven to be difficult to forecast and given the negative ‘shock’ from the August CPI, it would be difficult for any investor to have conviction going into this report,” according to Tom Lee, head of research at Fundstrat.
“For us, analyzing the month over month numbers is much more important than looking at the headline,” Zachary Hill, head of portfolio management at Horizon Investments, said in an interview.
“The way we’ve been thinking about it, the last three months annualized [inflation] gives you a kind of a decent idea of where the shorter term trends are around inflation,” Hill said. “We think that’s what the Fed is going to be looking at to see progress towards their 2% goal. And unfortunately, based on various measures, we’re nowhere near that today.”
Adding to the market anxiety, and keeping any Wednesday rally in check, is the continuing volatility in U.K. government bonds after the Bank of England reiterated it would stop supporting the market after Friday.
Investors have become increasingly concerned of late that severe stresses in the financial system may emerge as central banks switch from the era of zero or negative interest rates to sharply higher borrowing costs as they try to tackle inflation at multi-decade highs.
“[G]lobal financial conditions have tightened as central banks continue to raise interest rates. Our latest Global Financial Stability Report shows that financial stability risks have increased since our last report, with the balance of risks tilted to the downside,” said the International Monetary Fund in a report released on Tuesday.
“The mood of global investors was gloomy enough and hardly needed yesterday’s reminder from the IMF that the risks to financial stability have increased,” Ian Williams, strategist at Peel Hunt, noted. “Its report highlighted specifically (if obviously) the threats from persistent inflation, China’s slowdown and the war in Ukraine. The highlighted ‘disorderly repricing of risk’ is arguably already underway.”
The Fed may offer its view on the topic as a number of officials are due to give comments on Wednesday. Minneapolis Fed President Neel Kashkari said the Fed is “dead serious” about getting inflation down. Fed vice chair Michael Barr will speak at 1:45 p.m. The minutes of the Fed’s previous monetary policy setting meeting will be released at 2 p.m. ET and Fed governor Michelle Bowman will deliver comments at 6.30 pm.
Companies in focus
-
Shares of Philips
PHIA,
-12.27% PHG,
-11.33%
plunged 12% after the Dutch tech company issued its second profit warning this year, forewarning that supply chain problems will impact sales and third-quarter profits. -
Intel Corp.
INTC,
+1.50%
may fire thousands of workers by the end of the month, around the same time the chip manufacturer reports quarterly results amid a tough year for semiconductor makers, Bloomberg reported late Tuesday. The company’s shares rose 1% Wednesday. - Shares of PepsiCo Inc. climbed 4.6% Wednesday, after the beverage and snack giant reported third-quarter profit and revenue that rose above expectations and raised its full-year outlook, as higher prices helped offset some volume weakness.
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The Dow Jones Industrial Average
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Philips warns of 5% fall in like-for-like sales due to supply-chain woes
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Royal Philips NV said Wednesday that its performance for the third quarter was hurt by stronger-than-anticipated supply-chain challenges, and adopted a more pessimistic view on its sales through the end of the year.
The Dutch health-technology company
PHIA,
-8.01% PHG,
-0.80%
said that it expects to record a 1.3 billion euro ($1.26 billion) impairment charge in the period. The company said that this is an impairment of goodwill of Philips Respironics, its sleep and respiratory care business, and that it is due to revisions to the business’s financial forecast.This compares with adjusted Ebita of EUR512 million, or 12.3% of sales, a year earlier.
Analysts had seen the metric at EUR336 million, according to a consensus estimate provided by the company.
Philips expects to book a EUR1.3 billion impairment charge on its sleep and respiratory care business after revising its financial forecast for the unit, it said.
Group comparable sales for the quarter fell around 5%.
For the last quarter of the year, Philips now expects a mid-single-digit decline in comparable sales, it said.
In late July, Philips had guided for 6%-9% growth in comparable sales over the second half of the year.
“Philips still expects a better second half of the year, compared to the first half of 2022. However, the company sees prolonged supply chain disruptions and a worsening macro-environment,” it said.
The company said it expects adjusted Ebita margin to be in the range of a high single to double digit for the last quarter of the year.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com and Cristina Roca at cristina.roca@wsj.com
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Elite Member Perks Helps Timeshare Owners Profit from Unused Travel Points
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The travel points membership service is helping timeshare owners generate revenue from their unused points with its 100%, money-back guaranteed programs.
Press Release
–
Aug 24, 2022
WILDWOOD, Mo., August 24, 2022 (Newswire.com)
–
Elite Member Perks, a travel points management service, has begun helping timeshare owners discover new ways to profit from their unused points. The service, which specializes in helping clients get value out of their property ownership, is now helping timeshare owners with everything from mortgage management to maintenance fee payment plans, all without putting their lines of credit or financial situations at risk.In the post-pandemic era, online booking is the preferred method of travel, and vacation rentals are higher than ever. Those who purchase timeshares in the hopes of saving money and increasing their return on investment are often frustrated when the points that correspond to their allotted vacation time go unused at the end of a yearly cycle.
With Elite Member Perks, clients can enter into a lasting relationship with an expert team that will manage their points for them so that they may enjoy their vacations to the fullest. The Elite Member Perks team works to convert unused timeshare points into money in the form of reimbursement checks. When resorts refuse to buy timeshares back and the resale market fails to provide any value, the Elite Member Perks team can leverage its network to help clients receive reimbursement paychecks every quarter.
After recognizing the need to assist timeshare owners who were unable to take advantage of their ownership, principal owner Kyle Brown and his team set out to help individuals who were losing out on compensation from their unused points.
“We like to use the phrase ‘have peace of mind without losing a dime,’ when engaging with new clients,” said Brown. “Many timeshare owners fail to realize just how much compensation they are losing due to this issue. We work to educate our clients while simultaneously putting plans into action to reduce their losses and increase their revenue, all without ever putting their lines of credit at risk.”
Elite Member Perks primarily operates in Florida and Missouri. With physical office locations in both states, both teams have experienced tremendous growth in recent months. Both offices manage outreach and client services, and the Missouri office also oversees all reservations, customer service, onboarding, and payment processes.
Having just removed all sign-up fees from its programs, Elite Member Perks is looking to work with hundreds of new timeshare owners in the coming months. To learn more about Elite Member Perks’ programs, please visit https://www.elitememberperks.com.
About Elite Member Perks
We pay timeshare owners on their unused resort points. Points they can’t use for the year get turned into us for cash.
Contact Information
Mariah Harrison or Laura Bohannon @ (877) 600-5711
Email: Laura@elitememberperks.com
Source: Elite Member Perks LLC
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