Pre-market inventories: the worst start to the year since 2009
What’s going on: After rebounding nearly 27% in 2021, the S&P 500 ended January down 5.3%. It was the index’s worst January since 2009.
The tech-heavy Nasdaq Composite fell 9%, its worst kickoff since 2008. It is still in a correction phase, down more than 10% from its November peak.
“The main theme in January was undoubtedly the continuation of the hawkish pivot by a number of central banks in light of continued and lingering inflationary pressures, which led investors to expect a much faster upside cycle over the course of the year. coming months,” Deutsche Bank analysts said in a note to clients on Tuesday.
Small businesses whose fate is closely tied to the health of the US economy have also struggled. The Russell 2000 index, made up of these companies, lost 9.7% in January. That’s almost 17% below its November high.
The great unknown: is the turbulence here to stay?
The last few days have improved. The Dow Jones closed 1.2% higher on Monday, while the S&P 500 rose 1.9% and the Nasdaq jumped 3.4%.
Atlanta Fed President Raphael Bostic suggested over the weekend that the Fed could raise rates by 0.5 percentage points in March. On Monday, he clarified that a half-point rate hike was not his preference. Still, any hawkish remarks from policymakers over the next few weeks could trigger a backlash from jittery traders.
“Good riddance to January, but this month’s investing themes will persist,” Nicholas Colas, co-founder of DataTrek Research, wrote on Tuesday. Fed policy, he added, “remains the biggest wild card.”
The New York Times joins the game deal frenzy
It just happened: The New York Times has struck a deal to acquire Wordle, the hugely popular game that gives players six chances to guess a five-letter word a day.
The Times, which announced the purchase on Monday, is looking to expand its games portfolio, which also includes crossword puzzles and Spelling Bee.
“The Times remains focused on becoming the essential subscription for anyone who is English-speaking seeking to understand and interact with the world,” the company said in a statement, adding that games “are a key part of this strategy.” .
At the end of last year, the company had more than one million subscriptions to its gaming platform.
Take a step back: Josh Wardle, a Brooklyn-based software engineer, released the game in October 2021. It quickly became a cultural phenomenon. Millions of people now play Wordle every day, according to the Times.
The deal is just the latest (and okay, maybe the cheesiest) in a string of games industry tie-ups as tech, news media and entertainment companies compete for eyeballs and commitment time.
Why Netflix and Spotify Shares Just Appeared
But Citi analysts see the pullback as a buying opportunity. They upgraded both stocks to a “buy” recommendation on Monday.
Analysts believe Netflix has “sufficient pricing power”. The video streaming service recently said it would raise prices in the United States and Canada. They also believe that Spotify can “enhance ad-supported monetization”.
The report helped Netflix shares climb 11% on Monday, while Spotify jumped 13.5%.
Spotify’s rally also came after comedian Joe Rogan responded to backlash from artists like Neil Young over Covid-19 misinformation on his popular podcast, which is exclusively hosted on the music streaming platform. Rogan said on Sunday he was “satisfied” with Spotify’s decision to add reviews before podcasts that tackle the pandemic.
“I want to thank Spotify for their support during this time,” he said. “And I’m so sorry that this happened to them, and that they got so much heat out of it.”
On the radar: That doesn’t mean the controversy is over. What will Spotify do if more artists announce their intention to boycott? That’s a question the company should prepare for on Wednesday, when it releases its final quarter results.
Also today: January’s ISM manufacturing index is released at 10 a.m. ET.
Correction: An earlier version of this story misinterpreted comments from Atlanta Fed President Raphael Bostic. He said a half-point rate hike was possible but not his preference.