January 2022 will still go down as a turbulent and loss-ridden month for stocks, but at least it ended on a high note.
A relatively quiet news weekend followed by little in the way of fresh economic data gave investors little to go on Monday, but the session was peppered with a host of individual relief rallies.
Most notable was the S&P 500’s seventh-largest holding, Tesla (TSLA), which popped 10.7% thanks to Credit Suisse analysts, who upgraded the stock to Outperform after it lost 20% in January.
“With the market disproportionately punishing growth stocks in the past month, we believe an attractive entry point has emerged for Tesla,” said CS analysts, adding that Tesla checks off a number of boxes: attractive growth story, disruption, decarbonization and more.
Netflix (NFLX, +11.1%), Moderna (MRNA, +6.2%), PayPal (PYPL, +5.2%) and Nvidia (NVDA, +7.2%) were among other recently beat-up stocks that closed the month with a rebound.
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The S&P 500 gained 1.9% Monday to 4,515, leaving it down 5.3% for the month. That marks the index’s worst January since 2009, and the worst month for stocks overall since March 2020. The Dow Jones Industrial Average (+1.2% to 35,131) finished January off 3.3%, and the Nasdaq Composite (+3.4% to 14,239) trimmed its full-month losses to 9.0%.
Other news in the stock market today:
- The small-cap Russell 2000 also roared back Monday, jumping 3.1% to 2,028.
- U.S. crude oil futures surged 1.5% to settle at $88.15 per barrel.
- Gold futures gained nearly 0.6% to end at $1,796.40 an ounce.
- Bitcoin recovered some ground over the weekend and into Monday, improving by 1.9% to $38,484.05. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Spotify (SPOT) jumped 13.5% after the audio streaming service over the weekend said it would start adding content advisories to podcasts that contain information about COVID-19. This comes after several musicians, including Neil Young, pulled their music from Spotify to protest podcaster Joe Rogan from spreading misinformation about COVID-19 on his show “The Joe Rogan Experience.” SPOT was also upgraded to Buy from Neutral by Citigroup analysts.
- Barclays analyst Benjamin Theurer issued a double uptrade on Beyond Meat (BYND, +15.2%) stock today, raising his outlook on the plant-based protein maker to Overweight from Underweight (the equivalents of Buy and Sell, respectively), saying there are “more positives than negatives” in the U.S. alternative meat product market. BYND already has several high-profile partnerships, including with drinkmaker PepsiCo (PEP) and Taco Bell parent Yum! Brands (YUM). And earlier this month, McDonald’s (MCD) said in February it will boost its test market for BYND’s plant-based burger by another 600 locations.
A Weak Environment for IPOs, But …
Market pundits generally predict more volatility ahead, but that doesn’t mean investors should write off 2022.
“Market corrections are a normal part of investing and may present opportunities for value-conscious investors,” say Jason Pride and Michael Reynolds, CIO of private wealth and vice president of investment strategy, respectively, at investment firm Glenmede. “Growth should continue in 2022, albeit at a slower yet still acceptable pace consistent with an ongoing expansion.”
One area of the market desperately looking for signs of normalization and stability is initial public offerings (IPOs). Last year marked a banner year for IPOs, with more than a thousand companies raising roughly $316 billion, according to financial markets platform Dealogic. However, increased volatility slowed IPOs to a crawl in the latter part of 2021, and the slowdown extended into January.
Nevertheless, once the IPO gears start moving again, investors should be able to gain access to several exciting, well-known names. Here, we outline 11 companies widely expected to launch IPOs in the year ahead.