MarketBeat Week in Review – 1/16 - 1/20

The shortened trading week started as investors cheered a cooler-than-expected producer price index (PPI) for December. But that’s all come crashing down as recession fears remain top of mind for investors. This week saw earnings reports from the big banks, and the message was clear. The era of cheap money is over.

And with layoff announcements daily, virtually all economists are now conceding that a recession is inevitable. The only remaining questions are how long and how deep it will be. As earnings season kicks into high gear, the takeaway for investors remains the same. Look at companies that can deliver revenue and earnings during this time. And, as you’ll see from our MarketBeat contributors, you should also continue to look at those dividend stocks.  

Articles by Jea Yu 

As perhaps a harbinger of what to expect as the retail sector reports sales for this holiday season, Lululemon Athletica, Inc. NASDAQ: LULU is down after a disappointing earnings report. The company had been resilient in 2022. But as Jea Yu points out, the company is seeing margin compression as inventory levels rise. Yoga anyone? If consumers show off their latest athleisure wear, they may do it on Pinterest Inc. NASDAQ: PINS.

As Yu writes, the social commerce (not to be confused with social media) platform deserves a place on your watchlist as it captures the attention of the coveted Gen-Z consumer. And the company’s recent success is due, in part, to its short-form video content. Yu was also writing about Walgreens Boots Alliance, Inc. NASDAQ: WBA. The company posted a disappointing earnings number. But that was largely the result of the company settling its opioid litigation. That could mean investors can finally start focusing on the company’s growth plans.  

Articles by Thomas Hughes 

If investors needed confirmation of an economy headed for recession, they got that from JPMorgan Chase & Co. NYSE: JPM. As Thomas Hughes writes, the bank reported increased credit losses you would expect from a softening economy. To offset that, the bank showed an increase in its capital reserves.

That’s a delicate balance that highlights the strong fundamentals of the bank. But for investors, this is when good news is not good for the stock. Hughes also advised investors to be cautious about the post-earnings bump in UnitedHealth Group Incorporated NYSE: UNH stock.

While the stock is showing signs of bottoming out, Hughes notes there may be some more downside risk. For investors looking to find a place to hide out as the economy falters, Hughes suggests looking at these four dividend kings which also offer high yields for investors.  

Articles by Sam Quirke 

In a volatile market, investors can find safe havens in best-in-class stocks. And as Sam Quirke highlights, that is what you get with Visa Inc. NYSE: V. The stock is up 30% since October and has many analysts believing the stock has further to run. Another stock that Quirke believes investors should keep their eyes on is Intel Corporation NASDAQ: INTC.

The chip sector has been beaten down. The sector may still be in for a couple of rough quarters, but when it comes back, Intel is one to watch as its efforts to build up manufacturing capabilities in the United States align with the recently passed Chips Act.

And at a time when airlines are under scrutiny for many of the wrong reasons, Quirke was analyzing the situation with Delta Air Lines, Inc, NYSE: DAL. The company delivered strong earnings but weak guidance. Nevertheless, Quirke points out that solid fundamentals make DAL stock one to watch for later this year.   

Articles by Kate Stalter 

This week Kate Stalter had something for investors of different stripes. Growth investors are hungrily looking for places to put their capital to work. Stalter suggests you look at Airbnb Inc. NASDAQ: ABNB. The company beat its most recent earnings report, is seeing margin growth, and has been buying back its shares. Any growth stock carries outsized risk with the threat of a recession, but ABNB stock may be one to watch. If you’re an income investor, Stalter points out that you haven’t gotten much growth from a dividend king like Johnson & Johnson NYSE: JNJ. But Stalter points out a chart pattern that, if confirmed by next week’s earnings could change that story. And for tech investors looking for diversification, mid-cap stocks are always a solid choice. Stalter writes about two mid-cap tech stocks that are ready to break out.  

Articles by Matthew North 

Whether you agree with her or not, Woods has a consistently aggressive investment style focused on disruptive technology. So if you’re bullish on the future of this market, you’ll enjoy what Matthew North writes about three stocks Cathie Wood is buying for her ARK Innovation ETF NYSEARCA: ARKK.

On the other hand, if you’re more bearish on the market, you’ll be happy (is that possible?) to know that Michael Burry (yeah, THAT Michael Burry) continues to be bearish on the market. North summarizes Burry’s bearish outlook which is a must-read for any investor. And if that makes you want to sell everything, I suggest you read North’s article about three attractive defensive stocks. Not only will you benefit from being in a sector that tends to outperform in a bear market, but you’ll get a nice dividend for your trouble.  

Articles by Keala Miles 

There are times when even the best companies swing and miss. That may be the case for Pepsico Inc. NASDAQ: PEP. The company has introduced a new lemon-lime soda, “Starry,” that is not tickling the taste buds of consumers...yet. But as Miles writes, that doesn’t mean investors should be concerned about their investment in PEP stock. On the other hand, some investors may be looking to buy shares of T-Mobile US Inc. NASDAQ: TMUS after it reported strong earnings.

But as Miles points out, the stock has a high P/E rating that suggests it has a lot of growth already priced in. Finally, it wouldn’t be a week without one article about Elon Musk. In this case, Miles was writing about Tesla Inc.  NASDAQ: TSLA, which announced a price cut on many of its popular models. The move could allow consumers to take advantage of the tax credits from the Inflation Reduction Act. Like many things in the EV market right now, there are no guarantees, but the price cuts are having no effect on TSLA stock either way.