Stock Market Today: Live Updates

With most S&P 500 earnings reports lagging, it’s clear that companies are in revenue declines and facing a tough year regardless of the recessionary environment, says David Kelly, chief global strategist at JP Morgan Asset Management.

“As of last Thursday, with nearly 95% of the market cap reporting, the S&P 500 was tracking operating earnings of $49.37 per share, down 13% from a year earlier,” he said in a note on Monday. “Throughout 2022, S&P500 operating EPS looks set to decline by about 6%, following a 70% gain the previous year.”

“Even if the economy avoids recession, 2023 will be a tough year for corporate profits,” Kelly added. “In the event of a recession, profits will fall sharply. However, when the economy stabilizes and we believe an environment of slow growth, low inflation and low to moderate interest rates, profits may rebound. Outpacing overall economic growth.”

– Tanaya Machel

Bank of America says the time is right to buy Union Pacific after its current CEO, Lance Fritz, announced that he will step down this year.

Analyst Ken Hoekster upgraded the railroad operator’s stock to buy from neutral. Hoexter said the leadership change shows the agency is prioritizing operational reform after being flagged for poor service by the Surface Transportation Board last year.

“This in our view highlights the service and operational underperformance UNP has experienced over the past few years, which was one of the driving points for our downgrade last month,” Hoexter wrote Monday. “It also follows UNP being called to the Surface Transportation Board (STB) in December to describe the use of disruptions and poor service, the first time a train has been called out since CSX in 2016.”

CNBC Pro subscribers can read more about his update.

Steve Eisman of “The Big Short” fame believes that given the rise in interest rates, investors can no longer beat the market by investing in growth stocks.

“I think the days of people beating the market by investing in technology are over and we’re going to move into a new paradigm,” Eisman, a senior portfolio manager at Neuberger Berman, said on CNBC’s “Squawk Box.” Monday.

The widely-followed investor, who spotted the housing crisis earlier, believes that the rise in interest rates on the back of the Federal Reserve’s aggressive tightening is creating a sea change in the investment world.

He revealed that he was buying two-year risk-free Treasuries that yielded 4.8%.

– Yun Li

Technical strategists see stocks holding off temporarily and expect some support around the 200-day moving average in the S&P 500.

That level is 3,940 and is the average of the last 200 closing prices. It is considered as a bullish indicator and if the support fails, more losses can come to the index. The S&P 500 rose on Monday after its worst weekly loss last week.

Katie Stockton, founder of Fairlead Strategies, said the S&P 500 ended its three-week selloff Thursday. But tentatively around 3,940 can be fixed. “Given the recent decline in weekly stochastics from overbought territory, we assume the pullback will re-emerge next week,” he wrote in a note.

BTIG’s Jonathan Grinsky sees the same level for support, as well as another zone in the index that has seen high volume over the past few years. That level on the S&P 500 is between 3,925 and 3,950. Those levels were tested last week.

“While these areas may provide some near-term support, we expect an eventual breakout that opens the door to Dec. lows (3775). Rates and the dollar continue to rise as the 2-year yield hits new cycle highs,” he wrote in a note.

-Bar Dom

US stock markets opened higher on Monday.

The Dow Jones industrial average rose 231.26 points, or 0.7%. The S&P 500 rose 0.8% and the Nasdaq composite added 1.1%.

– Tanaya Machel

Durable goods orders fell in January, indicating that consumers are pulling back on spending on big-ticket items.

Sales of durable goods such as appliances, televisions and autos fell 4.5% for the month, worse than the Dow Jones estimate of a 3.6% decline. It increased by 5.1% in December.

Excluding a sharp decline in traffic, new orders actually rose 0.7%. However, excluding the defense sector, orders fell by 5.1%. A 13.3% drop in transportation equipment led the big decline.

– Jeff Cox

Best Buy fell 1.8% in the premarket on Monday after being downgraded by Telsi Advisory Group. The Wall Street firm cited the current economic climate and a disappointing outlook from other retailers such as Home Depot and Walmart for the downgrade.

“In the near term, we believe Best Buy’s business will experience further decline associated with challenging macro trends weighing on discretionary consumer demand, given high inflation and rising interest rates – resulting in lower forecasts for both sales and profits in 2023,” analyst Joseph Feldman said in a note to clients. wrote

He cut the price per share from $88 to $83. In the long run, he expects Best Buy to be one of the best operators in retail.

Warren Buffett’s Berkshire Hathaway may have run its course during trading on Monday after it reported on Saturday that its operating profit fell in the fourth quarter amid inflationary pressures.

Berkshire’s operating income — which includes profits from myriad businesses owned by the conglomerate, such as insurance, railroads and utilities — totaled $6.7 billion last quarter, down 7.9% from a year earlier.

The Omaha-based company used $2.855 billion to repurchase stock in the quarter, bringing the 2022 total to nearly $8 billion. That marked a slowdown from 2021’s record $27 billion as the billionaire investor found outside opportunities.

The “Oracle of Omaha” defended Berkshire’s stock buyback in its annual letter, calling critics “economically illiterate or silver-tongued.”

– Yun Li

The 2-year yield added to its February gains on Monday, reaching 4.8% on the day. This is its highest level since July 2007. Short-term rates rose this month as traders fretted over the prospect of tighter monetary policy for longer than expected.

JP Morgan analyst Day Lee thinks Zillow shares could rise nearly 20% from here, saying the company is well-positioned to weather a near-term housing market reversal.

“We believe in Zillow’s leadership as the most visited online real estate site, a business model based on core demand generation, solid margins (26% in ’22), and an active share repurchase program to drive Zillow’s best position.” [near-term] The real estate industry challenges and is emerging strongly on the other side,” Lee wrote in a Monday note.

– Hakyung Kim

Stocks fell sharply last week as new data and Fed comments stoked fears of longer-term higher rates, pushing Treasury yields higher. However, Adam Crisafulli of Core Knowledge thinks these concerns may be overblown.

“PCE was really warm, but the jobs report, CPI, PPI, retail sales, etc. were already in January – now the question is, will things be strong in February? We don’t think so, especially on the employment front,” Grizafulli said in a note.

– Fred Imbert, Michael Bloom

Pfizer is in talks to buy biotech giant Seagan, the Wall Street Journal reported, citing people familiar with the matter.

The deal is “expected to command a premium” over Seagan’s market capitalization of about $30 billion, the people told the Wall Street Journal, adding that discussions are at an early stage and a deal is not guaranteed.

The report comes after Seagan was in advanced talks last year to be acquired by Merck in a deal valued at $40 billion or more, the WSJ previously reported. Both sides failed to reach an agreement.

– Lim Hui Jee

Stock futures were little changed on Sunday evening.

The Dow Jones industrial average fell 15 points, or 0.05%. The S&P 500 lost 0.01%. The Nasdaq Composite rose 0.01%.

– Tanaya Machel