Another push higher in Treasury yields threatened a deep-red day for stocks, but the major indexes escaped with slight declines and even gains.
Further turmoil in the bond markets sent equities off to a rocky start for the week - though what was shaping up to be a significant loss turned out to be just a scrap.
The yield on the 10-year Treasury rose again to 1.808% on Monday after starting at 1.510% from 2021.
"While rates have been volatile throughout 2021, the 10 years before the pandemic have not reached this level," says Lindsey Bell, chief money and markets strategist at Ally Invest. "Information received since the start of the new year is making the case for Mr Markets that the Fed is going to raise rates and remove liquidity from the market at a faster rate than was thought just a week ago."
Remember: Federal Reserve members have indicated expectations of at least three hikes in the central bank's benchmark interest rate in 2022. Kiplinger predicts the Fed will raise rates four times, and over the weekend, Goldman Sachs predicted it. "I personally would be surprised if it was just four," JPMorgan Chase (JPM) CEO Jamie Dimon said on Monday.
However, heavy selling pressure on Monday morning eased in the afternoon as the 10-year rates supported their higher levels.
After its worst week in 11 months, the Nasdaq Composite fell as much as 2.7% at its nadir to 14,530 — nearly 80 points from official correction zone (a 10% or more drop from a peak) — but managed a modest gain of 14,942. ended with The Dow Jones Industrial Average (-0.5% to 36,068) and the S&P 500 (-0.1% to 4,670) closed down but closed well from their intraday lows.
Today's news in stock market:
- The small-cap Russell 2000 slipped 0.4% to 2,171.
- Gold futures ended marginally higher at $1,798.80 an ounce.
- US crude oil futures slipped 0.9% to end at $78.23 a barrel.
- Bitcoin, which was at $41,912.19 on Friday afternoon, fell below $40,000 earlier in Monday's session, but fell 0.5% to return to $41,714.45. (Bitcoin trades 24 hours a day; prices stated here are as of 4 p.m.)
- Take-Two Interactive (TTWO) is increasing its stake in the mobile video game world, announcing today that it is buying FarmVille maker Zynga (ZNGA) for $12.7 billion in cash and stock. This works out to $9.68 per ZNGA share -- a 61.3% premium from last Friday's close. "This strategic combination brings together our best-in-class console and PC franchises with a market-leading, diverse mobile publishing platform that has a rich history of innovation and creativity," said Take-Two Interactive CEO Strauss Zelnick. “We believe we will deliver significant value to both sets of stockholders, including $100 million of annual cost synergies within the first two years following closing and at least $500 million of annual net booking opportunities over time. " The deal is expected to be completed by the end of the second quarter by the time it gets the green light from regulators and shareholders. ZNGA shares rose 40.7% on the news, while TTWO fell 13.1% -- potentially making it an attractive entry point for investors looking to pick up one of the best communications services stocks for 2022 at a discount.
- Moderna (MRNA) was a rare speck of bright green today, the biotech CEO Stefan Bansel told CNBC's "Squawk Box" on Monday, adding that the company is working on a COVID-19 booster, the Omron version. will target. Bansal said mRNA believes it will be "the best strategy for potential boosters for fall 2022" after discussions with various public health officials. It comes as the Centers for Disease Control and Prevention (CDC) said immunocompromised individuals are now eligible for a fourth vaccine dose, as detailed Monday in our free A Step Ahead newsletter.
Will earnings shock the market?
Interest rates may be in the headlines now, but a new potential market mover appears later this week.
It's the unofficial start of fourth-quarter earnings season -- and while you can check out a schedule of key reports here, big names to watch include Delta Air Lines (DAL), Wells Fargo (WFC) and BlackRock (BLK).
According to FactSet, analysts' projected earnings growth rate for S&P 500 companies is 21.7% in the fourth quarter of 2021 -- if achieved, it would be the fourth consecutive quarter when earnings growth has topped 20%, giving investors Gotta give something to look forward to.
"While there are real risks, continued hiring and spending will support expected earnings growth," says Jeff Buchbinder, chief equity strategist at LPL Financial, who adds that "higher rates are generally associated with stronger rates" despite the risks of continued volatility. have happened. market performance".
Investors looking for ways to potentially dip during short-term volatility may consider Kiplinger's picks for the coming year -- such as our top stocks for 2022 or our best exchange-traded funds (ETFs).
That said, if you have a greater thirst for risk, and a speculative portfolio allocation that you can afford to lose, you might consider swinging for the fence - with the help of professionals anyway.
While Wall Street analysts don't typically make bullish calls, they have identified some stocks that they see, ahem, "going to the moon" in the next year or so. These 30 names in particular aim for at least 100% returns by consensus—and in many cases, much higher. But beware: this is a volatile bunch.