Wall Street Today | Goldman sees risk Fed will tighten more than forecast
U.S. food supply is under pressure, from plants to store shelves
The U.S. food system is under renewed strain as Covid-19's Omicron variant stretches workforces from processing plants to grocery stores, leaving gaps on supermarket shelves. In Arizona, one in 10 processing plant and distribution workers at a major produce company were recently out sick. In Massachusetts, employee illnesses have slowed the flow of fish to supermarkets and restaurants. A grocery chain in the U.S. Southeast had to hire temporary workers after roughly one-third of employees at its distribution centers fell ill.
Food-industry executives and analysts warn that the situation could persist for weeks or months, even as infections eases. Recent virus-related absences among workers have added to continuing supply and transportation disruptions, keeping some foods scarce.
Rising interest rates hit municipal-bonds market
Municipal bonds are off to their worst start since 2011.
The early-year bond rout has dragged returns on the S&P Municipal Bond Index to minus 1.1% through Jan. 20, counting price changes and interest payments. The loss is an early sign that rising interest rates could make 2022 rockier than last year, when federal stimulus and elevated demand from homebound savers led to record low volatility and historically high prices.
Apple, Microsoft and Tesla headline key earnings week amid Nasdaq's slide
Tech giants including $Microsoft(MSFT.US$ , $Apple(AAPL.US$ and $Tesla(TSLA.US$ are among the companies headlining a busy earnings week that comes as investors look for reassurance after the Nasdaq notched a 12% decline to start the year.
Overall, about a fifth of the $S&P 500 Index(.SPX.US$ and nearly half of the $Dow Jones Industrial Average(.DJI.US$ are expected to provide their quarterly updates during the week starting Monday, according to FactSet.
Also expected to report quarterly updates are industrial conglomerates like $GE Aerospace(GE.US$ and $3M(MMM.US$; food heavyweights $Mondelez International(MDLZ.US$ and $McDonald's(MCD.US$; and other big names in manufacturing, pharmaceuticals and telecommunications.
Apple nears first product launch of 2022, with 5G iPhone SE and new iPad on tap
$Apple(AAPL.US$ is nearing its first , with a new iPhone SE and iPad on tap. Also: The company to its App Store business model, and the autonomous car team loses another top manager.
Apple typically follows a pattern of spacing out its new product releases each year. In the spring, it launches updates to its more minor or complementary products. In the summer, it reveals new software and holds its developer conference. Apple then saves major new hardware for the fall.
Inflation poses risks of faster, less predictable Fed rate increases
The Federal Reserve is entering an unfamiliar environment at the start of 2022. For the first time in decades, officials are preparing to raise interest rates when inflation is uncomfortably high rather than very low.
The last time the Fed lifted rates from near zero, at the end of 2015, inflation was running below its 2% target and the unemployment rate—a measure of labor slack—was declining gently.
When Fed officials meet this Tuesday and Wednesday, they will confront an unemployment rate that has dropped like a stone—to 3.9% in December from 5.9% in June. Consumer prices rose 5.7% in November from a year earlier, using the central bank's preferred gauge.
Goldman sees risk Fed will tighten more than forecast
$Goldman Sachs(GS.US$ economists said they see a risk the Federal Reserve will tighten monetary policy more aggressively this year than the Wall Street bank now anticipates.
The Goldman Sachs economists led by Jan Hatzius said in a weekend report to clients that they currently expect rates to be increased in March, June, September and December and for the central bank to announce the start of a balance sheet reduction in July.
But they said inflation pressures mean that the "risks are tilted somewhat to the upside of our baseline."
They have been made more concerned by the omicron variant prolonging supply-demand imbalances and by continued strength in wage growth. That all suggests to them the likelihood of ongoing inflation pressures amid a mix of lingering supply chain problems, hot wage growth, strong gains in rents and very high short-term inflation expectations.
Solana suffers network instability during brutal week for Crypto
Solana, one of the largest blockchain networks, was hit by instability during a turbulent week for cryptocurrencies.
The issue experienced by validators that use their computing power to help verify the network was caused by excessive duplicate transactions, according to a notice on the Solana website dated Jan. 22. Engineers have released version 1.8.14, which "will attempt to mitigate the worst effects of this issue," the notice said. It added that more improvements are expected to come out in the next eight to 12 weeks, and many of those features are being "rigorously tested."
Amazon stock just had its worst week since 2018
Shares of $Amazon(AMZN.US$ fell 12% for the week, as a broader market sell-off pressured technology stocks.
It marks Amazon's worst one-week performance in four years, since Dec. 21, 2018, when the shares fell 13.4%. Markets dropped Friday as investors grappled with the prospect of higher interest rates and mixed company earnings reports.
The tech-heavy $Nasdaq Composite Index(.IXIC.US$ slumped 1.9%, and the $S&P 500 Index(.SPX.US$ declined 1.3%. The $Dow Jones Industrial Average(.DJI.US$ slid 1.3%.
Source: Bloomberg, CNBC, WSJ
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