In this article, we will take a look at 10 stocks that trended this week.
The markets remained volatile this week as the Dow Jones, S&P 500 and the NASDAQ each fell by around 3%. Despite the more attractive valuations, the markets likely fell this week due to continued concern that the Federal Reserve will keep raising interest rates to fight inflation.
The Federal Reserve has already increased the interest rate by 5 times this year and there could be even further increases with Federal Reserve Bank of Atlanta President Raphael Bostic saying, “The lack of progress thus far has me thinking much more now that we have to get to a moderately restrictive stance. And for me, that is in the 4.25% to 4.5% range for our policy. My preference is that we get there by year end.”
If interest rates continue to go up, the economy could slow as borrowing costs increase.
Amid the market decline, several stocks such as NIKE, Inc. (NYSE:NKE) and Carnival Corporation (NYSE:CCL) were in the spotlight this week for various reasons. Furthermore other stocks such as Wells Fargo & Company, BlackRock, Inc. (NYSE:BLK), and The Walt Disney Company (NYSE:DIS) also trended.
Source: pexels
10. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 72
NIKE, Inc. fell over 14% this week with much of the drop occurring after the clothing giant reported rising inventories and lower margins for Q1. For the period, Nike’s inventories rose 44% year over year and its gross margins fell 220 basis points. Furthermore, the company expects FY23 gross margins to decline by 200 to 250 basis points for FY2023. Given the challenges, Simeon Siegel of BMO Capital cut his price target on NIKE, Inc. to $110 from $128 but kept an ‘Outperform’ rating. Siegel still likes NIKE, Inc. in the long term given the company’s scale and other competitive advantages.
9. Carnival Corporation (NYSE:CCL)
Number of Hedge Fund Holders: 24
Carnival Corporation declined over 21% this week given the company reported Q3 EPS of -$0.65 versus the consensus of -$0.13. Sales for the company were $4.31 billion, versus the consensus of $5.07 billion. Q4 might not be as great as the company also said its Q4 cumulative advance bookings were ‘below the historical range’. Given Carnival Corporation’s debt, the stock could be very volatile depending on how demand changes. If future bookings are weaker, demand for Carnival Corporation could not be as high as expected.
8. Royal Caribbean Cruises Ltd. (NYSE:RCL)
Number of Hedge Fund Holders: 28
Royal Caribbean Cruises Ltd. (NYSE:RCL) fell 14.7% this week given Carnival Corporation’s Q3 results and advance bookings commentary. Given that they are in the same sector, demand for Royal Caribbean Cruises Ltd. could be affected by the same factors as Carnival Corporation. If advance bookings is weaker for Carnival Corporation, they might not be as strong for Royal Caribbean Cruises Ltd..
7. Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH)
Number of Hedge Fund Holders: 28
Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH) fell over 16% this week with much of the drop likely due to the Carnival Corporation news. Since they are in the same sector, demand for cruises from Norwegian Cruise Line Holdings Ltd. might not be as strong if demand for cruises for Carnival Corporation are weaker than expected. If demand isn’t as strong, the earnings results of Norwegian Cruise Line Holdings Ltd. might not be as great. Shares of Norwegian Cruise Line Holdings Ltd. are down 45% year to date.
6. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Bank of America Corporation (NYSE:BAC) declined by 4.8% this week due to the broader market decline of 3%. Although Bank of America Corporation can potentially earn more money if interest rates go higher, the bank could also lose money if the economy slows too much. If that happens, Bank of America Corporation write-offs might increase. Shares of the stock are down 32% year to date.
Some other stocks such as Wells Fargo & Company, BlackRock, Inc., and The Walt Disney Company also trended this week.
5. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. declined by over 4.2% given the decline in the financial sector and the 3% retreat in the broader market. Despite the volatility, Reuters reported that JPMorgan Chase & Co. intends to hire 2,000 engineers globally through the end of the year. JPMorgan Chase & Co.’s global chief information officer Lori Beer said, “We’re definitely still hiring.. When you’re going into a tough economic time and things are very volatile, it does play into our favor.”
4. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 82
Citigroup Inc. (NYSE:C) fell over 5.8% and was the worst performer among the major U.S. banks this week as investors worried over a potential economic slowdown. Citigroup Inc.’s balance sheet isn’t as strong as JPMorgan Chase & Co.’s and the company’s earnings per share might not do as well if it has to write down more assets during a recession. Shares of Citigroup Inc. are down 31% year to date.
3. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 83
Wells Fargo & Company fell only 0.5% this week and outperformed both the broader market and its major bank peers. Although mortgage rates have gone up, much of the mortgage rate rises thus far have probably been priced in. Wells Fargo & Company has also decided to focus less on the mortgage business going forward. Shares of Wells Fargo & Company have fallen 16.2% year to date.
2. BlackRock, Inc. (NYSE:BLK)
Number of Hedge Fund Holders: 50
BlackRock, Inc. fell almost 7% this week due to the market decline. BlackRock, Inc.’s earnings might not do as well if markets decline because its AUM could have a harder time increasing. The financial institution also trended after Reuters reported BlackRock plans to reduce leverage in its liability-drive investment funds amid the U.K. pension crisis. Shares of BlackRock, Inc. are down 40% year to date.
1. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 109
The Walt Disney Company fell 5.2% due to the broader market decline. The Walt Disney Company also trended after Jessica Ehrlich of Bank of America cut her price target on The Walt Disney Company to $127 from $144 citing, among other factors, lower projected Disney+ net adds along with the impact of Walt Disney World closures due to Hurricane Ian.
You can also take a look at 10 Quality Stocks With Dividend Yields Over 2% and 10 Dividend Stocks to Buy According to Billionaire Cliff Asness.
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This article is originally published at Insider Monkey.
