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The market kept digging and digging… and then it stopped. Market indexes picked up Monday morning from where they left off Friday afternoon, which is to say: down big. The Dow was hoping to break a seven-session losing streak (with the S&P 500 and Nasdaq down five straight), but at its low point today, the blue-chip index dumped a frightening -1115 points. The Nasdaq was -5% at its session lows.
And then we saw the indexes come roaring back, particularly in the last hour of regular trading, which surged each major index into the green by Monday’s closing bell! The Dow ended the day +101 points, +0.30% — for an incredible 1200-point swing — while the S&P nearly matched: +0.29%. The Nasdaq reached positive territory ahead of the others, +0.63% on the day, while the badly beaten-down small-cap Russell 2000 outperformed the others: +2.29%.
It’s not like we’d just finally touched into correction territory, either — we’d been there for a while now, at least on the Nasdaq (-18%) and the Russell (-20%). Perhaps the trigger was pulled on a few key names that finally became too attractive to pass up, and as the leading algos switched course, the others followed suit. In any case, a happy ending to start what looked like another gruesome week in the market.
The one bit of good news this morning was regarding Kohl’s KSS, which had been mired in the middle of its five-year trading averages until a news report that private activist investor firm Acacia was looking to buy the department store retailer for $64 per share. Competition then followed from Sycamore, which offer $65 per share. This brought Kohl’s shares +33% on the day, with potentially more upside.
What either private firm would do with Kohl’s is not totally clear; however, by one account, the company has over $7 billion in real estate assets alone. The stock reached a record high in 2018 above $80 per share briefly. At this stage, Kohl’s trades at $63 and change. This story is developing.
After today’s close, IBM Corp. IBM reported Q4 earnings, in what amounts to the first bumpy quarter in recent history for the tech giant, which hadn’t missed earnings estimates in almost eight years. But with the spinoff of its managed infrastructure business Kyndryl, IBM earnings and revenues both came in light of Zacks consensus expectations.
That said, the company’s +6.5% sales growth in the quarter was the highest in the past decade. Higher-growth areas of IBM include Red Hat (+21%), Hybrid Cloud (+19%), Consulting (+16%) and Software (+10%), and are part of CEO Arvind Krishna’s vision for a faster-growing, higher-margin conglomerate of tech businesses. Shares are up +5.6% on the earnings release, swinging to positive value year-to-date. Guidance for 2022 is said to be provided in the upcoming conference call.
Tomorrow, we get a bigger helping of Q4 earnings reports, including General Electric GE, Johnson & Johnson JNJ and 3M MMM in the morning; Microsoft MSFT after the closing bell. For the next few weeks, we expect Q4 earnings to give shape to the overall economic view. We’ll also find out plenty as of Wednesday’s conclusion to the latest Fed meeting how monetary policy will transpire going forward.
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