Markets Review/Preview: Earnings and Russia Dominate
Sabre, DoorDash rally, while Roblox, Roku take a big hit.
The fears of a Russian invasion of Ukraine that weighed on global financial markets appear likely to continue as investors also keep watch on earnings reports and await next month's Federal Reserve decision on interest rates. Markets in the U.S. will be closed Monday for the Presidents Day holiday.
Several large retailers are expected to report earnings in the coming days. Among the scheduled earnings reports:
Looking back at the week ended Feb. 18, 2022:
The Morningstar US Market Index fell 1.7% as investors contended with the possibility of an attack by Russia on Ukraine and an increase in volatility. Oil hit a seven-year high as investors tried to assess how sanctions against Russia, a major oil producer and exporter, could impact global supply.
Real estate investment trusts moved higher with Vornado Realty Trust (VNO) having risen 7.7% and SL Green Realty (SLG) up 7%. Pebblebrook Hotel Trust (PEB) and Host Hotels & Resorts (HST) also closed higher.
A slew of disappointing earnings in the communication services sector drove some of the worst-performing stocks in the past week. Among them were Roku (ROKU), Roblox (RBLX), and Altice USA (ATUS). Fastly (FSLY) and Masimo (MASI) also posted steep losses.
Roku fell 31.4% after management announced a 35% revenue growth target for 2022, down from their 55% target in 2021. Shares are down 50.7% YTD.
Gaming platform Roblox fell 25.6% after showing slower user growth and weaker-than-expected profitability. Similarly, cable provider Altice USA was driven down 22.2% after posting a net loss of 13,000 residential customers in the fourth quarter.
Several online retailers fell ahead of earnings. Luxury fashion retailer Farfetch (FTCH) fell 16.1%, Wayfair (W) down 12.1%, and Etsy (ETSY) slid 10.2%. All three companies are expected to report earnings on Feb. 24, 2022.
Jakir Hossain does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.