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Zacks Analyst Blog Highlights: Tesla and Intel

For immediate release

Chicago, IL – January 27, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: Tesla TSLA and Intel INTC.

Here are highlights from Wednesday’s analyst blog:

Bear country: Tesla and Intel beat Q4 earnings but sell off

Wednesday afternoon, in its press release following the last Federal Open Market Committee (FOMC) meeting, the Fed kept interest rates unchanged at 0.00-0.25%. This is not surprising, as the final tranches of the wind-down program, which buys less and less Treasuries and mortgage-backed securities, are scheduled to end in March. In a separate note, the Fed also plans to shrink its balance sheet by $9 trillion, but not before interest rate moves begin.

This is all as expected on Wall Street: Markets have been busy over the past few weeks pricing in no less than four interest rate hikes in 2022, or roughly one every two FOMC meetings this year. Even still, stocks hit session highs less than 20 minutes after the Fed’s statement was released. And the markets continued to fall for Fed Chairman Jay Powell press conference following the FOMC statements, as the 10-year Treasury yield initially rose above 1.8%, pushing towards 1.86% by the time Powell finished answering questions.

In substance, nothing different was highlighted this time: inflation continues “well above 2%”, with residual supply/demand imbalances from the ongoing pandemic being largely responsible; the unemployment rate has fallen sharply, with a historically strong demand for labor and “moderate” participation by an aging population. Powell said interest rate policy will require “humility” and being “agile.”

Powell also gave no reassurance as to whether that now all-but-certain rate hike in March will constitute a quarter-point or half-point hike, citing that the FOMC will make that decision at its meeting in March. March. In short, he left the door open for increased hawkishness, and that would no doubt hinge on inflation readings from economic releases over the next six weeks until the next meeting. Nor is the Fed chairman suggesting that “only” four rate hikes could be on the way for 2022.

Regardless of whether or not the Fed should be more hawkish in its monetary policy going forward, it could be said that Powell slipped through his fingers a chance to assure market participants that there will be no reckless advance of rate hikes and balance sheet evacuation. Powell has proven over time to be sensitive to economic concerns but perhaps slow to react; in the interest of quashing this narrative about his leadership of the Fed, he appears to be on board with investors believing he will move higher and faster than expected. Markets turned from green to red at the time of the closing bell.

You’re here shares fell -5% immediately after its fourth-quarter earnings report hit the band after the closing bell on Wednesday, even as the electric vehicle leader beat expectations both up and down Earnings of $2.54 per share easily topped the Zacks consensus of $2.11, while $17.72 billion in quarterly sales topped the $16.07 billion analysts were looking for. Shares edged higher ahead of the company’s conference call. After a difficult period in its earnings history a few years ago, Tesla has exceeded expectations in nine of the past 10 quarters.

Intel also fell on its easy fourth-quarter beats yesterday afternoon, with earnings of $1.09 per share on $19.5 billion in revenue well ahead of the 90 cents per share and $18.3 billion analysts expected. The forecast for next quarter earnings was 80 cents per share, which is below the Zacks consensus of 84 cents. This may partly explain why Intel hasn’t recorded a revenue shortfall since the third quarter of 2013.

Markets were down across the board except the Nasdaq, which was mostly flat. This is bearish territory this winter, and even the Fed’s policy projections are unable to put them back into hibernation at this point. The Nasdaq is down 17% from its all-time highs set in November last year. The S&P 500 is -10% off its most recent highs. The small cap Russell 2000 gave up all of its 2021 gains, and more.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.

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