Stocks Gain Momentum In Volatile Trading Session

5:04 pm Thursday, January 20th, 2022

U.S. stocks extended gains in a broad rebound across markets as the global sovereign-bond selloff paused and investors focused on earnings to assess the recovery.

There isn’t one specific event underpinning the rebound bias, but there’s a prevailing view that the recent selling had gotten overdone on a short-term basis and the market was due for a bounce. While investors haven’t sold into strength, the market has struggled to gain traction.

Presently, all 11 S&P 500 sectors are trading higher with gains ranging from 0.4% (consumer staples) to 1.6% (information technology), and eight sectors are up by at least 1.0%.

The rebound bias has lifted most types of equities, from growth stocks to value stocks, and mega-caps to micro-caps. The growth stocks have the performance edge, though, which isn’t too surprising since they’ve been hit the hardest.

In addition, the stock market has overlooked weaker-than-expected weekly jobless claims and existing home sales for December and has taken a liking to earnings news and a well-behaved Treasury market. The 10-yr yield is unchanged at 1.83%.

Dow component Travelers (TRV) beat EPS estimates, as did Union Pacific (UNP), Kinder Morgan (KMI), American Airlines (AAL), and United Airlines (UAL) shares trade lower.

Separately, shares of Peloton (PTON) have plunged 16.5% after CNBC reported that the company is aiming to halt production of its bikes due to significantly lower demand, as well as higher costs. PTON shares are halted for trading.

Initial claims for the week ending January 15 increased by 55,000 to 286,000 (consensus 211,000) while continuing claims for the week ending January 8 increased by 84,000 to 1.635 million.

Existing home sales declined 4.6% m/m in December to a seasonally adjusted annual rate of 6.18 million (consensus 6.42 million). Total sales in December were down 7.1% from a year ago. Total home sales in 2021, however, reached 6.12 million, which was up 8.5% year-over-year and the highest annual level since 2006.