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Volatility Re-enters on Oil Prices, Russia, etc.

The markets they giveth, and the markets they taketh away. Volatility continues for all major indexes — coming from higher highs as the opening bell sounded to lower lows on the closing bell. The Dow swung more than 500 points today, to close -96 points or -0.29%; the Nasdaq dumped -214 points or -1.56%. Somewhere in the middle are the S&P 500 (-0.52%) and the Russell 2000 (-1.29%). Stocks are now on pace for their fourth straight weekly loss.

The Nasdaq got hit today as tech selling resumed, especially in the software space. This came after Snowflake SNOW fell -15% following its disappointing quarterly report after Wednesday’s close. The tech-heavy index is back to -17% below its all-time high set four months ago. And tech isn’t even the lowest-trading sector for the week: that would be financials.

Much of this topsy-turvy trading is a result of uncertainty, courtesy a Russia-Ukraine war threatening to dig its heels in for some time. About the only thing certain regarding this prospect is that oil prices can be expected to continue to move higher. As Fed Chair Jay Powell said on Capitol Hill today, an increase of $10 per barrel roughly equates +0.2% of inflation and -0.1% growth. We’ve already seen prices per barrel gain about $20 in the past week.

Powell reiterated most of his earlier stance that slow and steady interest rate increases will be how he captains the ship over the next several meetings, starting with the one on the 15th and 16th of this month. The Fed Chair also admitted the committee was behind the curve on tapering asset purchases and subsequently hiking rates to stem the tide of inflation last year. Yet a 50 basis-point move is likely not going to happen for the March meeting; the Fed is expected to continue its slow and methodical approach.

Broadcom AVGO shares are up in after-hours trading by +3.5% following beats on both top and bottom lines in its fiscal Q1 report. Earnings of $8.39 per share outpaced the Zacks consensus by 23 cents per share, while revenues of $7.7 billion easily shucked expectations for $7.16 billion in the quarter, and gained +16% from the year-ago top line.

Even better, Broadcom’s revenue guide for next quarter is now $7.9 billion, much higher than the $7.37 billion analysts had been looking for. The company also bought back $3.1 billion in shares for the quarter. This afternoon’s gains take a bite out of the -12.77% loss in AVGO shares year to date; the stock is up +30.44% year over year.

Costco COST also posted a stronger-than-expected quarter on both earnings and sales, with $2.92 per share on $51.9 billion surpassing the $2.67 per share on $51.31 billion for its fiscal Q2. Total comps were up +14.4% in the quarter; ex-gasoline prices, this comes to +11% — still healthy. The one smudge in today’s earnings report for Costco was its softer International numbers. This is the fourth-straight earnings beat for the membership-only big-box retailer.

And Gap GPS shares took off this afternoon on a better-than-expected bottom line — -$0.02 per share versus -$0.14 estimates — on in-line sales of $4.5 billion. Comps grew 3% as the apparel giant continues to work through its Old Navy supply chain issues. However, while initially shares shot up +16% on the report, but hav e now ebbed to +6.6% after hours. The Gap had been down -22.5% year to date and -43.8% year over year.

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