• Last week the S&P 500 had its best week since November 2020, cutting its loss for the year to just 6.7%. Some investors are hopeful that the gains will continue despite the war in Ukraine and inflation, which have led to Fed to start increasing interest rates. Since 1983, the S&P500 has returned and average of 5.3% in the six months following the first Fed rate rise.
• One-third of all tech companies that went public in the last four years are now trading below the valuation they had before their IPO. This realization is leading to large re-valuations for tech companies that are still private. For example, Fidelity just marked down its investment in Instacart by 18%.
• Analysts now believe short-term interest rates could be around 2% by the end of 2022. This would mean companies that are sitting on a large amount of cash could earn more on their money. For example, Apple ($203 billion of cash), Alphabet ($139 billion of cash), and Berkshire Hathaway ($144 billion in cash) could see their earnings rise 3%, 4%, and 8%, respectively, in 2023.
• Despite the rising price of oil & gas Americans are still looking to travel in the states. Data from AirDNA shows that the booking pace for travel in northern hemisphere is 49% higher than this time last year and 26% higher than 2019 (pre-pandemic). This surge is partially resulting from a decrease in travel to Europe.