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Author Message   Entrepreneur Kurra Bewarse Username: Entrepreneur Post Number: 3930 Registered: 05-2011 Posted From: 24.164.46.35 Rating: N/A Votes: 0 Posted on Tuesday, January 18, 2022 - 2:42 pm:    Market Briefing: Undercut by rate-hike angst and disappointing earnings The major indices are struggling to begin the shortened week and it isn't simply because of weakness in the mega-cap stocks and growth stocks. Today's weakness is wide ranging and has been catalyzed by worries about rising interest rates and disappointing Q4 earnings results from Dow component Goldman Sachs (GS 351.23, -29.71, -7.8%). Goldman's profit growth was constrained by higher than expected expenses, which was due largely to higher than expected compensation expenses. That understanding is feeding concerns that other companies will share a similar narrative; hence, today's early selling interest is cutting across both value and growth stocks and is affecting nearly every sector. The lone winner on the sector front is the energy sector (+1.1%), which continues its outperformance as oil prices ($85.30, +1.48, +1.8%) continue to rise. Exxon Mobil (XOM 73.47, +1.60, +2.2%), which shared a goal today to have net zero carbon emissions by 2050, is a standout in the space. The move in oil prices is fueling concerns that inflation will be higher and more persistent than Fed officials previously expected. The inflation-sensitive 10-yr note yield has jumped eight basis points to 1.85%; meanwhile, the 2-yr note yield, which is more sensitive to changes in the fed funds rate, has jumped seven basis points to 1.03% -- its highest level since February 2020. A lot of attention has been paid to the market pricing in the prospect of four rate hikes in 2022, on top of quantitative tightening measures, to help rein in inflation. There is even some chatter that the Fed might feel compelled to raise the fed funds rate by 50 basis points at its March FOMC meeting to regain some inflation-fighting credibility. In a separate development, Microsoft (MSFT 308.41, -1.79, -0.6%) announced a $68.7 billion, or $95.00 per share, cash acquisition of entertainment software company Activision Blizzard (ATVI 83.75, +18.36, +28.1%). That news, however, has failed to alter the broader market's interest rate angst. The Russell 2000 is down 1.3%; the S&P 500 and Nasdaq Composite are down 1.4%; and the Dow Jones Industrial Average is down 1.5%.