Markets Review/Preview: CPI Ahead; Earnings Wind Down
Oil tops $116, Occidental and Kroger hit new highs. Travel and European bank stocks continue to slip.
The roller-coast ride for financial markets triggered by Russia’s attack on Ukraine looks likely to continue, having added a new wrinkle to inflation concerns ahead of an all-but-certain interest-rate hike later this month by the Federal Reserve.
The latest measure of U.S. inflation, which is now at a 40-year high, will come when the government releases February’s consumer price index report Thursday. The data is expected to show that inflation remained elevated even before the surge in commodity prices sparked by Russia’s attack.
Oil, wheat, and gas all hit multiyear highs in the past week, with crude briefly rising to more than $116 per barrel. Saudi Arabia’s energy minister and the head of Saudi Aramco, the country’s national oil company, are scheduled to speak at a conference this coming week.
Fourth-quarter earnings reports will tail off, with most major companies having already reported.
Among the expected earnings reports:
- Tuesday: Prudential PUK
- Wednesday: Adidas ADDYY, Crowdstrike CRWD, Marqeta MQ
Walt Disney’s DIS investor day is also scheduled for Wednesday.
For the trading week ending March 4:
- The Morningstar US Market Index slid 1.6%.
- The best-performing sectors were Energy up 9.6%, and Utilities 4.4%.
- Financial service stocks were dropped 5.6%.
- Yields on the U.S. 10-year Treasury note fell to 1.73% from 1.98%.
- Oil ended the week up more than 26% to close at $115.68 per barrel.
- Of the 861 U.S.-listed companies covered by Morningstar 318, or 37%, rose, and 541, or about 67%, fell.
Best-performing stocks in the past week were Occidental Petroleum OXY, Kroger KR Albertsons Companies ACI, Sociedad Quimica Y Minera SQM, and Mosaic MOS.
Oil companies gained on rising prices, which briefly hit $116 per barrel for the first time since 2008. Occidental rose 44.9%, hitting a 52-week high, and Liberty Oilfield LBRT rose 19.2%. APA APA and Continental Resources CLR also closed higher.
Grocers Kroger and Albertsons rallied, with Kroger rising 26.9% after beating estimates and giving an upbeat outlook for the rest of this year. Albertsons’ shares rose 21.7% after the company said it would undergo a strategic review of its business. Retailers Nordstrom JWN, Target TGT, and Best Buy BBY also gained.
The week's worst-performing stocks were Telecom Italia TIIAY, Viatris VTRS, Farfetch FTCH, Societe Generale SCGLY, and Groupon GRPN.
Concerns over Russian exposure continued to hurt European bank stocks. Societe Generale fell 27.5%. Intesa Sanpaolo ISNPY and Ing Groep ING were also down.
European auto shares were hit on fallout from the war. Volkswagen VWAPY was down 24.5%, Stellantis STLA fell 21.5%, and BMW BMWYY slumped 20%.
Travel stocks fell, with some of the biggest gainers in recent weeks sliding. Sabre SABR fell 22.7%, Carnival CUK down 19.3%, and Royal Caribbean RCL off 16.9%. Airlines United Airlines UAL, Delta Airlines DAL, and American Airlines AAL all closed lower on concerns about rising oil expenses.