• This past week Amazon (the 4^th largest US company) had the largest one-day increase in market value in American history. Meanwhile Meta (the 7^th largest US company) had the largest one-day decrease in market value, losing $250 billion. Clearly investors are starting to make distinctions between the largest technology firms and are no longer treating them all the same.
• The 10-year treasury yield has risen to around 1.9% in 2022. This has led investors to re-evaluate their allocation to growth companies, which are often expected to generate higher levels of cash flow further out in the future. This is one reason why the S&P500 value index has outperformed the S&P500 growth index by 8.8% so far this year.
• Amazon and Ford both have ownership stakes in Rivian stock, which helped boost their latest 4Q21 earnings. Amazon reported a net income of $14.3 billion, which included a $11.3 billion gain from the Rivian stake, while Ford reported an $8.2 billion gain from Rivian. Rivian’s stock price though, has dropped from $104 at the end of 2021, to around $62 today. Both Ford and Amazon may be reporting a sizeable pre-tax loss next earnings.
• Despite increased volatility in the stock market the economy may be turning a corner with positive data coming in indicating the effects of omicron may be dissipating. The seven-day average of new covid-19 cases in the US fell nearly 40% last week, online searches of covid have dropped around 75% since mid-January, and the US economy added 467,000 jobs last month.