Stocks Bounce Off Session Lows Ahead Of Fed Statement
5:03 pm Tuesday, January 25th, 2022
Wall Street plunged then pared losses on Tuesday, with interest-rate sensitive tech and tech-adjacent large caps weighing heaviest as uncertainties surrounding an increasingly hawkish Federal Reserve and rising geopolitical tensions contributed to the market’s churn.
The inability to follow through on yesterday’s successful comeback has weighed on risk sentiment, raising concerns that yesterday’s trade was a stepping stone to a lower low amid an inclination to sell into strength.
Furthermore, better-than-expected earnings reports haven’t provided the relief investors were hoping for, presumably because the market is more interested in what the Fed has to say tomorrow following its two-day policy meeting.
Dow components Johnson & Johnson (JNJ), American Express (AXP), IBM (IBM), Verizon (VZ), and 3M (MMM) are trading mixed following their EPS beats. AXP is the big winner in the bunch with a 7% gain.
Former Dow component General Electric (GE) also beat EPS estimates, but it’s down 7% after missing revenue estimates and guiding FY22 EPS below consensus.
In M&A news, Bloomberg reported that NVIDIA (NVDA) is planning to end plans for its $40 acquisition of Arm Holdings due to little progress achieved in regulatory issues. The FTC will file a lawsuit to block Lockheed Martin’s (LMT) $4.4 billion acquisition of Aerojet Rocketdyne (AJRD).
Elsewhere, the Treasury market is trading lower despite the weakness in equities. The 10-yr yield is up two basis points to 1.76%, although it was trading at 1.79% overnight. The U.S. Dollar Index is up 0.2% to 96.09.
