It's Gonna' Be A Long Year...

It's Gonna' Be A Long Year...

Happy New Year folks!

We’re back with the first weekly roundup of 2022, and boy, the year is taking up where 2021 left off — in volatility. 

So, I guess it’s best to just don the armor and dive into the breach once more my friends.

Here were the biggest movers in the MyWallSt shortlist this week:

Moving Up ⬆️

Ford Motor Company (F) +17.8%

TrueCar (TRUE) +8.5%

Silicon Valley Bank (SIVB) +8.1%

Axos Financial (AX) +6.4%

Berkshire Hathaway (BRK.B) +4.8%

Moving Down ⬇️

Upstart Holdings (UPST) -21.7%

Cloudflare (NET) -20.9%

Datadog (DDOG) -19.2%

Bill.com (BILL) -18.6%

Atlassian (TEAM) -17.7%

What investors need to know

Moving up

Ford Motor Company (F) +17.8%

A surprising yet welcome bit of green in a sea of red, the famous ol’ carmaker is making moves off the back of EV optimism and the strength of Tesla’s December sales. Despite seeing its total 2021 sales fall nearly 7%, Ford closed the year strongly, selling 508,451 vehicles to achieve a 27% gain on Q3. Investors are also excited about the huge demand for Ford’s electric pickup option — the F-150 Lightning — which has had its production goal doubled for a second time to 150,000 sales per year by 2023. With its stock price rising 140% in 2021 and outpacing its competitors, investors are excited to see what 2022 brings.

Silicon Valley Bank (SIVB) (+8.1%) and Axos Financial (AX) (+6.4%)

Despite less reassuring news from the Federal Reserve, which we’ll cover below, banking stocks welcomed a strong start to the week thanks to a Treasury yield rally. As fears that the Omicron variant of COVID-19 could disrupt the economy begin to allay, investors grew optimistic that the rising yield could forecast profits for banks. After all, rising longer-term interest rates can help banks grow profits. It means they can widen the spread banks earn on longer-term assets, such as loans, that are funded by shorter-term liabilities.

Moving down

Many Tech Stocks

Our list of losers is populated by the shriveled husks of promising tech companies in high-growth mode. Upstart Holdings (UPST), Cloudflare (NET), Datadog (DDOG), Bill.com (BILL), Atlassian (TEAM), and many others have fallen victim to a Fed-induced wave of bearish behavior. The Fed’s December minutes suggest that it will end the bond-buying program it began at the beginning of the pandemic and even raise interest rates in March. What’s more, the Fed’s minutes indicate that it will shrink its own balance sheet following these rate hikes, which will remove liquidity and reduce the country's money supply.

This is obviously bad news for the markets and growth stocks which rely heavily on lines of credit in particular. However, it’s not the end of days for these businesses. Many of these remain disruptors in their respective industries and maintain the same bull thesis as when we first added them. Cyclical macroeconomic issues such as interest rates will come and go and those of us holding for the long term need not panic just yet.

JamieJamie

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