In hisDaily Market Notes report to investors, while commenting on earnings, Louis Navellier wrote:
Earnings Insights
Earnings season is in full swing, and interest rates, energy, and gold are rising.
Q1 2022 hedge fund letters, conferences and more
Sixty companies report first-quarter earnings this week, which will give real insight into the ability of different industries to pass on higher costs to maintain profit margins and grow revenues. Investors pulled $12.6 billion out of US equity funds last week, the most since December, reflecting concerns over growth prospects in the face of rising inflation and interest rates.
Market indexes have opened modestly higher, led by energy and mining, with tech still under pressure as the outlook for supply dislocations persists. Interest rates pushed higher over the weekend, with the US 10-year rising from Thursday's 2.65% to 2.88%, pulling back to 2.83% this morning.
Higher mortgage rates have begun to take a toll on the housing markets. China announced surprisingly strong 4.8% GDP Q1 growth given their extensive Covid lockdowns.
Feeding Inflation
Gold is approaching $2K an ounce, a reflection of inflation concerns, while crypto sags as it continues to track high-valued tech trends. Crude oil and natural gas moved higher on supply concerns, as commodities across the board in food and metals rose feeding inflation trends.
Durable Consumer
In company news, Elon Musk's bid for Twitter (NYSE:TWTR) is drawing a lot of attention, with the board implementing a poison pill defense and Musk suggesting he's considering a tender offer to shareholders. Bank of America (NYSE:BAC) reported a beat on top and bottom, the stock is up 2%, with the CEO seeing a durable consumer with low unemployment, rising wages, and high cash balances.
The week ahead will be telling on which sectors investors can look to for growth in the shadow of higher inflation and interest rates and where the post-Covid reopening demand will continue to have traction. Energy, commodities, and travel-related names have the wind at their backs.
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