Energy Stocks, FedEx Earnings, GameStop Report: 3 Things to Watch By

© Reuters

By Sam Boughedda

– Stocks rallied on Thursday as investors settled into the knowledge that the Federal Reserve is likely to raise rates at each of its remaining meetings this year, after lifting the short-term benchmark a quarter-point on Wednesday.

The Fed’s move was of course well-telegraphed and long expected. The central bank’s policy setting members are forecasting the fed funds rate to end up the year around 1.9%

Despite rising rates, tech stocks rose 1% on Thursday. Normally rising interest rates would spark a sell-off in growth stocks, but investors can’t seem to resist big tech companies.

The broader rally in stocks could also indicate investors believe the Fed will be able to fight inflation by raising rates without tipping the economy into a recession, as is what tends to happen.

Economic data on Thursday showed new claims for unemployment insurance dropped to 214,000 last week, beating expectations. Continuing claims dropped to the lowest level since 1970.

Earnings season is largely over, though a couple more reports are due out from GameStop and FedEx on Thursday after the closing bell.

President Joe Biden is scheduled to talk with China’s Xi Jinping on Friday, expected to emphasize the consequences of assisting Russia either militarily or financially in getting around Western sanctions for its incursion into Ukraine.

Here are three things that could affect markets tomorrow:

1. Another day watching oil

The International Energy Agency said three million barrels per day of Russian oil and products could be shut in from April, and that sent energy stocks up, including Occidental Petroleum (NYSE:OXY), Devon Energy (NYSE:DVN), and APA (NASDAQ:APA) which rose more than 9%, 9% and 7%, respectively.

Occidental Petroleum was also boosted by news that Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) purchased 18.1 million more shares of Occidental.

2. Logistics play

FedEx Corporation (NYSE:FDX)missed earnings per share expectations, while revenue exceeded forecasts thanks to a boom in online shopping. FedEx revealed earnings per share of $4.59 on revenue of $23.6 billion. Analysts polled by anticipated EPS of $4.68 on revenue of $23.4 billion.

The company said its results benefited from lower variable compensation costs and less severe winter weather, resulting in favorable year-over-year comparisons. However, the positive numbers were partially offset by the effects of the Omicron variant and higher purchased transportation costs and wage rates.

3. GameStop earnings

GameStop Corp (NYSE:GME) fell more than 7% in after-market trading after it reported a fourth quarter loss of $1.86, from $1.39 a year earlier, but that missed expectations for a profit of 85 cents a share. Revenue rose to $2.25 billion from $2.12 billion a year earlier.

GameStop, one the original so-called meme stocks, entered into a partnership with Immutable X to create a marketplace for nonfungible tokens, or NFTs. The partnership will provide the company with up to $150 million in IMX tokens upon achievement of certain milestones.

– staff contributed to this report

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