Stocks on Wall Street ended lower to close the first week of 2022 trading on Friday. It suffered its biggest weekly decline in nearly a year, as rising government bond yields caused a massive sell-off in many highly-valued technology stocks.
The week was up 26 basis points to close at 1.765% after the midweek release of . The benchmark registered a session peak of 1.801% on Friday, the highest level since January 2020.
The coming week is expected to be another busy week as Wall Street's fourth quarter earnings season kicks off, with names such as JPMorgan Chase (NYSE:), Citigroup (NYSE:), Wells Fargo (NYSE: ), and Delta Air Lines (NYSE:) all report their latest financial results.
Key economic data is also on the agenda, including the latest report and figures.
Regardless of which direction the market goes, below we highlight one stock that is likely to be in high demand in the coming days and another that could suffer new losses.
Remember, however, that our timetable is for the coming week only. From growing bets that Fed interest rates will rise faster than expected this year, the stock of Goldman Sachs Group (NYSE:) looks like a solid investment in the week ahead.
Higher rates and yields tend to increase the return on interest banks earn from their loan products, or the net interest margin – the difference between the interest income generated by banks and the amount of interest paid to their depositors. is paid. That should bode well for Goldman, which has prospered in recent months on the back of signs of robust investment banking activity, a booming IPO market and a recovering economy.
GS share is up 3.9% over the year and 37.1% over the past 12 months. It ended Friday's session at $397.51, not far from a record high of $426.16 reached on Nov. 2. At its current level, the New York City, New York-based financial services company has a market cap of approximately $132.6 billion.
Goldman, which will report its latest financial results for last quarter earnings and earnings before the US market opens on Tuesday, January 18.
Consensus estimates suggest that the investment banking giant, which has beaten Wall Street estimates for six consecutive quarters, is posting fourth-quarter earnings per share (EPS) of $11.75, down 2.7% from of earnings per share of $12.08 in the year-ago period.
However, revenues are expected to grow 2.2% year-over-year to $12.0 billion, benefiting from positive performance across the investment bank and record asset management fees.
Beyond the top-and-bottom numbers, investors will focus on the Wall Street powerhouse's continued efforts to return more cash to shareholders in the form of higher dividend payments and share buybacks.
To Dump: Robinhood Markets
Shares of Robinhood Markets (NASDAQ:) could fall to new lows in the coming days as investors continue to worry about the negative impact of various factors plaguing the popular trading platform.
With interest rates rising rapidly as the Fed prepares to tighten monetary policy more aggressively than previously thought, unprofitable tech companies like Robinhood appear poised for further losses.
In general, higher yields and expectations of a more aggressive Fed policy weigh heavily on high-growth technology stocks with high valuations, as it threatens to erode the value of their cash flows over the longer term.
HOOD shares — which began trading on the New York Stock Exchange at $38 after the company's much-hyped IPO in late July — closed Friday's session at $15.89, more than 80% below its record high of $84 ,12 on August 4. At its current level, the Menlo Park, California-based stock trading platform has a market cap of $13.6 billion.
Robinhood reports next profit after the US market close on Tuesday, January 25th. Consensus calls for a loss of $0.35 per share for the fourth quarter on revenue of $367.5 million.
The financial services company reported disappointing late October, warning that lower retail activity and seasonal headwinds were likely to continue through the end of the year.