Today in the Market (1/31/2022)

Good Evening. Here is everything you need to know to start off your week’s recap on the in’s and out’s of the major market and economic events.

Stocks rose on Monday as investors recovered from a month of market turbulence and looked ahead to another busy week of corporate earnings and economic data.

The S&P 500, Dow, and Nasdaq all concluded the day with gains. The S&P 500 gained over 2%, adding to Friday’s gains. In a back-to-back session, the Nasdaq gained more than 3%, posting its largest single-day gain of 2022 so far. On the long end of the curve, Treasury rates rose modestly, with the benchmark 10-year yield staying around 1.8%. After climbing for the sixth week in a row, crude oil prices in the United States added to their recent gains.

ACQUISITION

Bungie, the video game firm behind successful franchises like “Halo” and “Destiny,” is being acquired by Sony for $3.6 billion in a deal that further centralizes the increasingly growing game industry.

In a blog post, Jim Ryan, the CEO of Sony Interactive Entertainment, said “this is a strategic step towards continuing to evolve the gaming experiences that we build.” He goes on to say, “Bungie’s expertise in delivering a world-class service approach and long-term community engagement is extremely compelling and will support the development of several future live services titles from PlayStation Studios.”

The announcement comes less than two weeks after Microsoft announced its acquisition of Activision Blizzard, which owns popular franchises like “Call of Duty” and “World of Warcraft”.

RECAP OF JANUARY

Stocks have been choppy over the last month as the threat of higher interest rates and tighter banking conditions looms. This has been especially true for technology businesses whose stock prices are substantially based on predicted future earnings, which would be impacted by increasing interest rates. In January, the Nasdaq Composite lost roughly 9% of its value. In its worst month since March 2020, the S&P 500 fell more than 5%.

The consumer discretionary, real estate, and information technology sectors all underperformed in January, while the energy sector outperformed the overall market by 19%. The Dow Jones Industrial Average fell by more than 3%.

WHAT TO EXPECT THIS WEEK AHEAD

With another round of corporate earnings data slated to be released this week, new catalysts for the market and individual equities are expected. Alphabet (GOOG), Amazon (AMZN), and Meta Platforms (FB) are among the mega-cap technology companies due to announce quarterly results, along with AMD (AMD), Snap (SNAP), Wynn Resorts (WYNN), and Merck (MRK). These will be released during a busy week of new economic statistics, including the Labor Department’s monthly jobs report.

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