Fall of the Nasdaq, Katie Wood Foundation and the Growth of Oil and Banks: results of the first trading week

Падение Nasdaq, фонда Кэти Вуд и рост нефтянки и банков: итоги первой торговой недели

There were only five trading sessions in 2022, and many stocks have already managed to fall or rise by more than 10%. Here's why.

Fed broke the Nasdaq

В декабре Федрезерв объявил, which will accelerate the end of the stimulus program and end the purchase of Treasury bonds in March 2022. The regulator also announced a possible increase in interest rates during the year to 0,9%.

5 января банк опубликовал протоколы декабрьского заседания. Члены комиссии отметили восстановление рынка труда и высокую инфляцию, caused by soft politics. Now, in the opinion FED, politics should be changed, as inflation has become a greater threat, than a pandemic.

А еще члены комиссии обсуждали сокращение баланса, i.e. not a purchase, а продажу облигаций. In this case, the contraction can be faster., чем в 2017—2019 годы. The regulator plans to start cleaning the balance after the first rate hike, то есть в ближайшие месяцы.

It was the soft policy of the Fed that became one of the main reasons for the growth of shares in the last two years.. Buying up bonds, Федрезерв снижает их доходность, и инвесторы перекладываются в более привлекательный stock market.

Текущую программу количественного смягчения регулятор запустил в марте 2020 года, when index S&P 500 fell by 30%. Уже в августе индекс полностью восстановился, and the corona crisis was the shortest bear market in history.

On such news, the yield of ten-year US Treasury bonds in the first trading week of the year rose from 1,5 to almost 1,8%. А вот рынок акций негативно отреагировал на вероятное ужесточение политики ФРС. S indices&P 500 и Dow Jones с 3 on 7 January fell to 1,9 And 0,3%. Lost the most Nasdaq, в который входят дорогие технологические компании, — 4,5%.

Падение Nasdaq, фонда Кэти Вуд и рост нефтянки и банков: итоги первой торговой недели

Hedge Funds Dump Expensive Stocks

The sale in the stock market was exacerbated by hedge funds. Rising bond yields have forced money managers to dump overvalued stocks at a ten-year record pace.. As a result, Paycom papers, Service Now, Intuit, Fortinet, Accenture and others since the beginning of 2022 have fallen by more than 10%.

Shares of Salesforce and Adobe also fell by 10%. По мнению банка UBS, soon corporations will cut their software spending, and this will slow down the sales growth of Salesforce and Adobe. The bank lowered its target for Salesforce shares from 315 to 265 $, for Adobe shares - from 635 to 575 $. Recently, Bank J. P. Morgan also downgraded Adobe from Buy to Neutral due to a likely increase in interest rates..

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Since November 2021, Salesforce and Adobe stocks have already fallen by 26%, to 228 i 511 $.

Cathy Wood's fast-growing stocks are not rising yet

Cathy Wood's flagship fund ARK Innovation sank along with tech stocks. In 2020, the fund grew by 150%, in 2021 - fell immediately 24%, although S&P 500 за тот же период прибавил 27%. And in the first week of 2022, ARK Innovation lost another 11%.

According to data on 6 January, 36 from 43 shares in the fund fell by more than 40% from their highs. How many companies have lost this year, who hold a large stake in ARK Innovation: Spotify, Zoom, Coinbase — 4—8%, Teladoc, Block, Twilio — 10—13%, Unity — 16%.

More than others, the papers of the developer of digital media players Roku sank, которые занимают третью по объему позицию в фонде Вуд. According to Atlantic Equities, Roku's revenue growth may slow amid competition from companies like Amazon, Google и Samsung. Atlantic Equities set a target for Roku shares in 136 $.

Since the beginning of 2022, Roku has fallen by 21%, from July 2021 to 62%, to 180 $.

Падение Nasdaq, фонда Кэти Вуд и рост нефтянки и банков: итоги первой торговой недели

Cost beats growth

Selling revalued securities, investors invested in safer cyclical and value stocks. As a result, year-to-date shares of value from index S&P 500 noticeably outperforms growth stocks: +1,1 versus −4.5%.

Oil and gas sector, which in 2021 grew by 48%, already added in a week 10,6%. EOG promotions, Devon, Diamondback, Phillips 66, Schlumberger and many others went up by 10-17%.

Securities of companies from the banking industry, прибыль которых обычно растет вместе с процентными ставками, также сильно прибавили с начала года. So, Bank of America shares, Wells Fargo и Citi выросли на 9—14%.

In the industrial sector paper Boeing, General Electric, Caterpillar, Deere and all airlines have risen in price by 7-10%. But how much did the best stocks from other sectors add: Ford — 18%, ViacomCBS — 17%, Discovery — 28%.

Падение Nasdaq, фонда Кэти Вуд и рост нефтянки и банков: итоги первой торговой недели

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