5 Laggards For The Weekend – Seeking Alpha

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U.S stocks began the compressed holiday week on a sour note as investors assessed a multitude of uncertainties, including strict COVID mitigation efforts in China, continuing upheaval in Europe, and rapidly increasing interest rates, with the yield on the 10-year benchmark hitting 2.779% on Monday, its highest since 2019.

Indexes were further pressured on Tuesday following data that showed inflation rising to 8.5% in March. This was followed by the reiteration from various Fed governors of the need to aggressively take on inflation, signaling interest rate increases in increments of half a percentage point at subsequent meetings. Data within the report, however, suggested that inflation could begin to cool off, with the core reading rising at the slowest pace in six months, driven by a 3.8% decline in used vehicle prices. This positive observation offset some of the losses for the day.

Markets rebounded on Wednesday as the first batch of earnings were released from the airlines and the banks. Airline stocks rallied after a strong release from Delta Air Lines (DAL), while banks declined after underwhelming results from JPMorgan (JPM). Strong bookings for airfare and commentary from JPM indicate the underlying health of the consumer is strong, but vulnerable to heightened risks in the economy, such as from rising prices. This exposure is not only on consumer goods but also on producers, as indicated by the release of the producer price index, which rose by 11.2% from the prior year.

Equities appeared on track to end the shortened week on a mixed note, with investors left to digest a slew of various reports, including retail sales, consumer sentiment, jobless claims, and more earnings from the big banks. Jobless claims ticked up slightly but were still at historical lows. Furthermore, retail sales increased during March, but the gains were primarily driven by higher gasoline prices. Finally, rates on mortgages hit 5% for the first time since 2011. Despite the weak data, the DJIA was up at mid-day trading and the S&P was little changed.

Among individual stocks, shares in Twitter (TWTR) saw increased activity from Elon Musk’s decision not to join the board of TWTR on Monday and his subsequent offer on Thursday to buy the company outright.

The week offered potential buying opportunities on many stocks. For long-term, income-focused investors who seek upside at reasonable risk, there are five stocks this week that would fit well on the watchlist of any diversified portfolio.

Corning Incorporated (GLW)

GLW is a leading innovator in materials science that operates in five reportable segments: Display Technologies; Optical Communications; Specialty Materials; Environmental Technologies; and Life Sciences.

In 2021, the company reported +$14.1B in total net sales, nearly 60% of which were attributable to the Display Technologies and Optical Communications segments. Compared to 2020, total net sales were up over 20% and net income margins were also higher, despite the inflationary operating environment.

GLW Sales Disaggregation – Form 10-K

Within the Display Technologies segment, GLW is the largest worldwide producer of glass substrates for flat panel display glass. Furthermore, the company maintains a leadership position in the principal products of their Optical Communications Segment, which include carrier and enterprise networks. Their size and scale in these two largest segments are a competitive advantage when compared against their …….

Source: https://seekingalpha.com/article/4501497-5-laggards-for-the-weekend


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