Stocks Mixed to Start the Final Day of a Volatile Month

Oil prices continue to creep higher

U.S. stock futures are mixed as investors look to close out a volatile month of trading, with the Nasdaq gaining and the S&P 500 and Dow Jones dropping.

The S&P 500 is set to end January 7% lower, its worst monthly performance since March 2020. The Nasdaq has lost 12% for the month, its worst month since October 2008. The Dow is down about 4% for January.

Key Takeaways

  • Stocks are mixed as traders look ahead to markets facing rising interest rates and geopolitical concerns after a wild January.
  • Oil continues its upward march, and some analysts are predicting $100 per barrel by this summer.
  • NXP Semiconductors, Otis Worldwide, and L3Harris Technologies are among companies reporting earnings today, with Alphabet, Amazon, and Meta reporting later this week.

Oil prices continue to rise, set for their best monthly gain since February 2021, as some analysts see oil topping $100 a barrel for the first time since 2014. Light sweet crude is nearing $88 per barrel, a seven-year high, fueled by tight supplies and concerns about tensions between Russia and Ukraine.

On Friday, stocks rebounded from a sell-off driven by mixed corporate earnings, geopolitical concerns, and a Federal Reserve poised to raise interest rates in March.  

Stocks in Europe jumped 1%, led by technology stocks. In Asia, markets were closed in China for the Lunar New Year holiday, while stocks in Japan added more than 1%.

Companies reporting earnings today include NXP Semiconductors N.V. (NXPI), Otis Worldwide Corporation (OTIS), and L3Harris Technologies Inc. (LHX). Later this week, Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), and Meta Platforms, Inc. (FB) will report their results. 

Amazon, Alphabet, and Meta vs. S&P 500 year to date
Amazon, Alphabet, and Meta vs. S&P 500 year to date.

Later this morning, the Institute for Supply Management releases its Chicago Purchasing Managers' Index for January. The consensus estimate is for a reading of 60.2, about three points lower than in December.

On Friday, the government will report its latest jobs data for the month of January, which is expected to show that employment growth likely picked up moderately for the month after rising far less than expected in December.

Today's Headlines: Quick Hits

Citrix Systems, Inc. (CTXS) will be taken private by Elliott Management and Vista Equity Partners for roughly $13 billion, The Wall Street Journal reported. The deal for the cloud computing company continues a spate of record deal-making activity for private equity.

Spotify Technologies S.A. (SPOT) announced the addition of content warnings, in response to COVID-19 misinformation criticism of podcaster Joe Rogan. Rogan apologized after Neil Young and other artists had their music pulled from the streaming service, pledging to be more balanced and informed.

T-Mobile US, Inc. (TMUS) will reportedly fire employees who are not fully vaccinated against COVID-19 by April 2. The company told employees that workers who have only received one dose as of Feb. 21 will be put on unpaid leave.

The Goldman Sachs Group, Inc. (GS) increased CEO David Solomon's pay by 27% to $35 million. Solomon's pay will roughly equal that of Morgan Stanley's (MS) CEO James Gorman, and will be slightly higher than that of JPMorgan Chase & Co. (JPM) CEO Jamie Dimon.

Spider-Man: No Way Home stayed at the top of the weekend box office, with $11 million in domestic ticket sales. Box office sales were hurt by a weekend snowstorm in the Northeast.

Big Tech Earnings: The Big Story

Big tech earnings will once again take center stage, as Amazon, Google parent Alphabet, and Facebook parent Meta Platforms all report results later this week

Alphabet will report on Tuesday, Feb. 1, and is expected to show solid growth in earnings, powered by its digital ad and cloud businesses. Cloud performance has been a key driver of Alphabet profits. Revenues are expected to be near $60 billion. Alphabet's stock price is down about 8% so far this year.

Amazon reports on Thursday, Feb. 3, and is anticipated to report a drop-off in profits, hurt by rising costs amid supply chain issues. Amazon's revenues are expected to grow by about 10% from a year ago, but that is the slowest pace since the pandemic began, when customers flocked to e-commerce sites for shopping. Shares of Amazon have lost close to 14% so far this year.

Meta Platforms (formerly Facebook) will report its latest results on Wednesday, Feb. 2, and is expected to show an increase in revenue, while profits are expected to fall slightly. Facebook also has a new financial structure that includes more detail on its "Family of Apps" segment that includes Facebook, Instagram, Messenger, WhatsApp, and other services. Another segment of attention will be its "Reality Labs," which includes augmented and virtual reality software and hardware.

Investors will be focusing on comments from CEO Mark Zuckerberg on spending on the Reality Labs business and the metaverse. Meta's stock price fell over 10% so far this year.

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