Today in the Market (1/26/2022)

Good Evening. Here is today’s recap on the in’s and out’s of the major market and economic events.

Stocks ended the day mixed following the Federal Reserve’s latest monetary policy decision, in which the central bank reaffirmed market expectations that interest rate hikes would soon begin as the economy recovered and inflation remained high. The Fed provided little concrete details concerning the timing and pace of its balance sheet reduction operation.

After climbing by more than 2% at session highs, the S&P 500 finished slightly lower. The Dow finished lower as well. After climbing more than 3% at the day’s highs, the Nasdaq trimmed its gains and ended the day in the green.

A BLAST FROM THE PAST

A year ago today, shares of GameStop, a struggling video game retailer, were up 90% in regular trading and another 60% in extended trading. It was the start of the “meme stock craze,” a few-week period during which ordinary investors flocked into stocks that had been written off or extensively shorted by professional investors.

Some projected that the world of investing would be irreversibly changed as a result of the emergence of meme culture on social media, improved access to the stock market through no-fee platforms like Robinhood, and rising antipathy against Wall Street “suits.”

GameStop and AMC stock, like most other firms, has taken a beating in 2022, with both down at least 35% year-to-date (though their share prices remain well above their pre-meme stock days).

Despite a couple of crypto-related antics attempting to capitalize on their godlike status among individual traders, both meme stock darlings have had to deal with real-world issues. For example, AMC is reportedly looking to refinance its high-interest debt with box office levels well below pre-pandemic times

Big picture: Interest in meme stocks in general looks to be dwindling.

EARNINGS

Despite supply chain difficulties that have afflicted the global auto industry on an unprecedented scale, Tesla (TSLA) released fourth-quarter numbers after the bell on Wednesday that topped analyst projections. Nonetheless, the electric car behemoth’s stock was dragged down when the company stated that supply difficulties are likely to persist.

While Wall Street expected revenue to achieve a new high, investors were focused on Tesla’s production forecast for clues on the company’s ability to generate earnings and profit in the coming year.

Despite reporting a quarterly profit and sales that were well above analyst expectations for the fourth quarter, Tesla’s stock fell 11.55% to $829.10 per share after the electric vehicle maker admitted supply chain issues would likely strain operations and cause new vehicle launches to be halted this year.

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