Musk’s Twitter moves stir fears and 2 other things to watch in the market next week
Elon Musk will participate in a question-and-answer session for Twitter employees, possibly next week, after buying in and joining the board. Also: Notable economic reports and the big banks release earnings.
The Nasdaq Composite and the S&P 500 extended their losses this week, with technology shares lagging as the Fed remains in focus. As of Friday afternoon, the Nasdaq is down 3% for the week, while the S&P 500 is just slightly in the red. Meanwhile, the Dow Jones Industrial Average (DJIA) entered positive territory early Friday.
Here are three things to watch next week that could affect your stocks.
1. What’s next for Twitter?
We learned this week that Elon Musk has taken a major stake in the social media company, picking up roughly 73 million shares, or a 9.2% stake. Next week, we may learn what that means.
The news sent shares of Twitter (TWTR) higher by about 27%.
Musk is now officially on Twitter’s board of directors and is pushing for an edit button, and some Twitter users are urging him to follow through on his push for free speech and to reinstate former President Donald Trump’s account.
Trump was banned from Twitter and Facebook after the Capitol riot on January 6, 2021.
Meanwhile, some Twitter employees are reportedly panicking over the future of Twitter and its ability to moderate content.
Twitter now plans to host Musk for an “ask me anything” session, according to the Washington Post. This could be as soon as next week, but a date hasn’t been set and it won’t be public. We imagine things will leak out. Shares of Twitter have faded lower since popping Monday but they’re still up around 8.5% for the year.
2. Economic reports and indicators
The monthly consumer price index (CPI) is out Tuesday, and then jobless claims toward the end of the week. The numbers could lead the Fed to raise interest rates more quickly than the market expects.
On Wednesday, the Fed released the minutes to its Federal Open Market Committee (FOMC) meeting from March 15–16. Fed officials discussed how they want to reduce the bloated nearly $9 trillion balance sheet, agreeing to a $95 billion monthly runoff, minutes released Wednesday showed. This includes $65 billion in Treasuries and $30 billion in mortgage-backed securities. These caps would be phased in over a period of three months.
Inflation has been rearing its ugly head and the labor market tightened even further this week. Initial jobless claims fell to their lowest level since 1968, the Labor Department reported Thursday. Initial filings for unemployment dropped to 166,000.
Looking to the week ahead, here are the major economic reports slated for release:
- Consumer price index (monthly). Scheduled for Tuesday.
- Initial jobless claims. Scheduled for Thursday.
3. Big bank earnings are coming
Significant geopolitical and economic uncertainties are facing banks right now — like everyone else. With the Fed’s recent move to raise interest rates, one would think the outlook for banks should be good. That said, bank earnings could be scattered, with many expected to be down after the sector’s volatile first quarter. For instance, JPMorgan Chase (JPM), Wells Fargo & Co (WFC) and Citigroup (C) are all expected to deliver a year-over-year decline in earnings when they report results for the quarter ended March 2022.
But most experts agree a recession isn’t likely for at least 12 months. The selloff in bank stocks could be investors fearing an impending recession, but if it holds off, bank stocks should start to benefit from rising rates.
- JPMorgan Chase & Co (JPM). Scheduled for Wednesday.
- Wells Fargo & Co (WFC). Scheduled for Thursday.
- Morgan Stanley (MS). Scheduled for Thursday.
- Goldman Sachs Group (GS). Scheduled for Thursday.
- Citigroup (C). Scheduled for Thursday.
- US Bancorp (USB). Scheduled for Thursday.
- PNC Financial Services Group (PNC). Scheduled for Thursday.
- Ally Financial (ALLY). Scheduled for Thursday.
Meanwhile, Ark Invest CEO Cathie Wood told CNBC Friday that banks may be starting to feel the disruptions of cryptocurrency. “Banks have a big problem,” Wood said while attending the Bitcoin (BTC) 2022 conference in Miami. “They’re losing talent to crypto, so they’re having to raise wages to attract talent, and they’re losing business to DeFi. Lending and saving – a lot of it is taking place in DeFi right now.”
Other notable earnings:
- Albertsons Companies (ACI). Scheduled for Wednesday.
- CarMax (KMX). Scheduled for Tuesday.
- Delta Air Lines (DAL). Scheduled for Wednesday.
- Bed Bath & Beyond (BBBY). Scheduled for Wednesday.
- UnitedHealth Group (UNH). Scheduled for Thursday.
And remember, it’s a four day trading week next week. The market will be closed Friday for Good Friday.
At the time of publication, Matt Miczulski owned BTC and shares of WFC.
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