Zacks Investment Ideas Highlights: CrowdStrike, Splunk, Alaskan Air, Uber and SoFi

0

For immediate release

Chicago, IL – January 28, 2022 – Zacks Investment Ideas features today feature the following: CrowdStrike CRWD, Splunk SPLK, Alaskan Air ALK, Uber UBER, and SoFi SOFI.

Fed Chair Powell’s wait-and-see approach is bullish for stocks

The Federal Reserve showed an intentional lack of clarity in its post-meeting statements on Wednesday afternoon (1/26), emphasizing the flexibility of its monetary policy approach throughout 2022, which which President Powell explained was impossible to predict at this time.

The initial policy statement indicated an end to asset purchases at the beginning of March and assured that it would adjust monetary policy accordingly, which dismissed some overly hawkish concerns. The FOMC statement emphasized its benchmark Fed Funds rate as its main weapon against inflation (i.e., the method of adjusting its policy), as opposed to an immediate cut in the balance sheet.

There was no mention of an early balance sheet reduction strategy in that afternoon statement, with Powell saying the tactical balance sheet reduction conversations hadn’t even begun. He made sure to clarify that the Fed has no intention of starting its asset withdrawal until the market has adjusted to take-off (initial rate hike). Investors wanted to see a definitive strategy regarding asset liquidation, with the Fed holding an incomprehensible $9 trillion in mostly fixed-income assets.

Jerome Powell has stuck to his largely accommodating guns, while retaining that warmongering flexibility needed to maintain his credibility. Still, he remained firm on his stance that it will be a natural reduction in inflation as COVID subsides and supply issues ease.

Powell acknowledged that bottlenecks and supply chain issues have been longer and more widespread than expected, and acknowledged the long-term risks of sustained wage growth. The Omicron variant had a prolonged impact on price pressure as it weighed on staffing, but he concluded that the latest pandemic strain is running its course much faster than previous waves. Powell hinted at the idea that price pressures from COVID should start to ease this year.

The real challenge facing the Fed here is to navigate this return to normalization of rate hikes at a pace that would help calm outsized inflation, but not inhibit the prosperity of the US economy and the market. exceptionally healthy work.

Powell may have left investors more uncertain about monetary policy after that meeting than before. The Fed Chairman’s nimble dance around the Fed’s 2022 plan will only change with the economic data. Jerome is clearly waiting for his theory of the natural deceleration of inflation to materialize, which it almost certainly will. The question is when?

U.S. economic recovery is gaining momentum in the face of latest (highly contagious but less severe) Omicron variant, with last quarter of 2021 showing GDP growth of 6.9%, well above estimate consensus of 5.5%, and now Jerome says GDP growth in 2022 will likely exceed the 4% expected by the Fed.

Powell knows how devastating a currency shock would be not only for the stock market, but also for consumer sentiment, which he must keep supported to avoid a double-dip recession.

The Fed does not want to interrupt this healthy economic growth by flooding the securities market with new, higher-rate bonds while drawing on the supply of liquidity (i.e. shrinking its balance sheet). Investors should have been delighted to hear these dovish inclinations from the market throughout its Wednesday press conference, but the immediate reaction was dampened by Powell’s monetary uncertainty.

The market slipped as much as 3% as the Fed Chairman was on the podium, thankfully those loyal correctional buyers made sure the S&P 500 closed safely above that downside mark of – 10%.

In fact, in all three trading sessions this week, the S&P 500 has fallen into intraday correction territory to close above this threshold each time. It would appear that many market participants are calling for a bottoming out of this vegetable variety correction at the most predictable level imaginable.

The short-term bottom may have solidified in the market following Jerome’s firm stance on a natural deceleration in price pressures as the economic symptoms of COVID fade (wait and see the political approach).

Many stocks (especially in the oversold growth areas of the market) are eager to push higher with a sound economic recovery in full swing (6.9% fourth quarter GDP growth) helped by an overly dovish Fed, while that strengthening quarterly results add that extra hint of a bottom to the air.

My top picks for 2022: CrowdStrike, Splunk, Alaska Air, Uber, SoFiand more.

Good luck there!

Dan

Equity Strategist & Responsible for Headline Trader Wallet department at Zacks Investment Research

The infrastructure stock boom will sweep America

A massive push to rebuild America’s crumbling infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.

The only question is “Are you going to get into good stocks early when their growth potential is greatest?”

Zacks released a special report to help you do just that, and today it’s free. Discover 7 special companies looking to make the most of building and repairing roads, bridges and buildings, as well as transporting goods and transforming energy on a scale almost unimaginable.

Download FREE: How to Leverage Trillions of Dollars in Infrastructure Spending >>

Follow us on twitter: https://twitter.com/ZacksResearch

Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including broker and investment adviser), which may engage in transactions involving the aforementioned securities for clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

https://www.zacks.com

Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.

The infrastructure stock boom will sweep America

A massive push to rebuild America’s crumbling infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.

The only question is “Are you going to get into good stocks early when their growth potential is greatest?”

Zacks released a special report to help you do just that, and today it’s free. Discover 7 special companies looking to make the most of building and repairing roads, bridges and buildings, as well as transporting goods and transforming energy on a scale almost unimaginable.

Download FREE: How to Leverage Trillions of Dollars in Infrastructure Spending >>

Click to get this free report

Alaska Air Group, Inc. (ALK): Free Inventory Analysis Report

Splunk Inc. (SPLK): Free Stock Analysis Report

Uber Technologies, Inc. (UBER): Free Inventory Analysis Report

CrowdStrike (CRWD): Free Stock Analysis Report

SoFi Technologies, Inc. (SOFI): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Share.

Comments are closed.