Welcome to this week’s Market News Roundup, thanks for being here.

Here’s what we’ll cover:

1. 🖼️ Big Picture: this week’s overall news sentiment

2. 📊 1 trending stock ($TWTR)

3. 📈 1 bullish stock ($QCOM) & 1 bearish stock ($UPST)

4. 🔭 Market Mood™ outlook for the week ahead

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1. 🖼️ Overall News Sentiment

In a shortened trading week abbreviated by the Easter holiday, sentiment measured in stock market news coverage came out relatively even on the whole with an overall sentiment score of +5% (on our scale from -100% to +100%). This net neutral sentiment came as the result of polarized conversation about the performance of large-cap and small-cap stocks: while articles written about the large-cap S&P 500 index expressed significant degrees of optimism on average (+36% 🟢), articles about the smaller-cap Russell 2000 index were much more pessimistic on average (-77% 🔴). This week’s news coverage was punctuated by the following topics and events:

📈 US Stocks: this week the three major U.S. stock indexes posted negative results again, with the NASDAQ trailing the Dow and the S&P 500 by a wide margin, just as it had the previous week. As the week’s trading closed on Thursday, the NASDAQ was down 8.7% from a recent high on March 29th.1 Anticipation of a sharp deceleration in earnings growth appeared to be one factor weighing on sentiment — in contrast to recent quarters, analysts have been lowering their earnings estimates and expect profits for the S&P 500 as a whole to have grown in the mid-single-digit percentages over the year before; the slowest pace of growth since late 2020.2

🦅 Economy: The government on Tuesday reported that the Consumer Price Index jumped to 8.5% in March (its highest mark since 1981, up from 7.9% the previous month). The bad news is that this historic inflation is taking a hit on the housing market in particular, with the average interest rate for a 30-year fixed-rate mortgage now above 5% according to the latest weekly report from the government mortgage company Freddie Mac Its highest levels since early 2011). The good news is that despite inflation, US retail sales rose by +0.5% in March, marking the 3rd consecutive month of retail sales gains.

2. 📊 Trending Tickers

Twitter Inc. ($TWTR):📲 — TRENDING NEWS 🔥

this week: +0.6% news sentiment 🟢 | -4.69% stock price 🔴

Cue the Elon memes…again. If you haven’t heard by now, Twitter was the talk of the town on Wall Street this week, finishing with a net positive news sentiment rating and falling nearly -5% in share price after Elon Musk offered to buy the social media app for $43B, in what seemed like it had the potential to become a hostile takeover. This big bid to take Twitter private marked a major escalation in a weeks-long battle by Musk to gain influence at the company, and follows his purchase of a 9% stake two weeks ago (which briefly made him Twitter’s largest shareholder before Vanguard increased its stake to 10.3% this week) along with some back and forth about him getting a seat on its Board of Directors.

Elon justified his intent to buy Twitter during his talk at a TED conference on Thursday, saying he thinks the platform is “essential to the functioning of democracy” and adding that he believes that it has the “potential to be the platform for free speech around the globe.” In the wake of his offer, Twitter’s board adopted a limited duration shareholder rights plan (often called a “poison pill”) as a way to fend off potential hostile takeover attempts like this. Under the new structure, if any person or group (like Elon) acquires beneficial ownership of at least 15% of Twitter’s outstanding common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount — essentially diluting the stake of the entity eying the takeover.

Our Thoughts: HOLD 🟨

3. 📈 Most Bullish & Bearish Tickers

my notes on a few tickers with the most bullish / bearish sentiment expressed in this week’s market news coverage:

Qualcom Inc. ($QCOM) ❄️ — BULLISH NEWS🔺

this week: +69% news sentiment 🟢 | -1.18% stock price 🔴

Despite slipping a mere -1.18% in share price, 5G semiconductor manufacturer Qualcomm finished as one of the most bullish stocks in market news coverage based on sentiment expressed in news articles throughout the week. This jump in optimism about Qualcomm in conversation stemmed from a pair of partnerships announced by the company late in the week, along with an article by Simply Wall St. arguing that $QCOM stock may currently be trading at a 72% discount relative to its intrinsic financial value.

Qualcomm announced on Wednesday that it has signed a multi-year deal with automaker Stellantis (the maker of Jeep, Fiat, Peugeot, Maserati, and others) to become its exclusive provider of “next-generation” connected-car technology, including 5G driver assistance and self-driving systems. The deal (for which no value has yet been disclosed) is set to introduce these new tech systems on select Maserati models starting in 2024 before expanding to other Stellantis brands. Qualcomm’s other big deal this week came Thursday in the form of a licensing agreement with wireless Internet of Things (IoT) provider Borqs ($BRQS). The deal will essentially enable Borqs to design and manufacture its own 5G products based on patents from Qualcomm’s latest technologies for its customers worldwide. In the wake of the deal, $BRQS share price rocketed up +39.9% to close the week at $0.24 per share.

Our Thoughts: BUY 🟩

Upstart Inc. ($UPST) 💡 — BEARISH HYPE🔻

this week: -87% sentiment 🔴 | -11.95% price 🔴

AI lending platform Upstart finished with the highest degree of negative sentiment expressed in news coverage this week while falling nearly -12% in stock price to $82.61 per share — its price is now down -34% over the past month and -78% (!!) from its all-time high of $390 back in October. This week’s negative $UPST movement and sentiment came for the most part after the government’s release of the Consumer Price Index report on Tuesday, which revealed that inflation in March reached 8.5%, its highest levels in more than 40 years. 

This abysmal inflation report, along with the first batch of earnings released last week from big banks like JPMorgan Chase ($JPM), Goldman Sachs ($GS), and Wells Fargo ($WFC), confirmed Wall Street’s fears that interest rates will be rough throughout the rest of the year — meaning far fewer consumers are expected to be taking out loans in the near future, and ultimately signaling that Upstart’s ambitious financial projections for 2022 now seem utterly unachievable. As one Motley Fool analyst put it, an inflationary slowdown like we’re currently seeing is the worst possible environment for high-growth fintech stocks like Upstart — hitting companies of the like on both stock price valuation and potential underwriting losses.

Our Thoughts: SELL🟥

4. 🔭 Market Mood Outlook

The good news stemmed from Wall Street analysts gearing up for earnings season (which has generally brought a slight bump to the markets over the past few quarters), while the bad news is that this season is preparing to be one of the least-fruitful since the start of the pandemic in 2020, brought down by some of the worst inflation of the past 40 years. Here’s my quick thoughts on earnings and inflation:

🌧️ Inflation: while headline inflation remains hot above 8%, we may be seeing early signals that it could peak in the weeks ahead. Most notably, the upward pressure on energy and commodity prices has shown some sign of abating, despite the ongoing crisis in Ukraine.3 The other two big inflationary components in question remain housing and auto pricing — home prices remain stubbornly high (though as mortgage rates rise we may see housing demand slow down to match the current record-low supply of homes on the market), and while new and used car prices moderated a bit in March, it’s hard to foresee how stable the market will be over the next few months.

🗓️ Earnings: A handful of major U.S. banks kicked off earnings season with mixed results. Overall, the biggest banks are expected to suffer from difficult year-over-year comparisons to the big profits they reported earlier in the recovery from the pandemic. As of Friday, analysts were forecasting that first-quarter earnings for banks in the S&P 500 fell 37% from a year ago, according to FactSet. On the whole, analysts have continued lowering their expectations for upcoming earnings, with average growth projections for the S&P 500 at a meager mid-to-single digit percentage over the whole year (the slowest pace since late 2020, according to FactSet). However, FactSet notes that companies do typically exceed analyst estimates by some margin; we will keep an eye on the first big crop of reports this upcoming week for more clues as to how earnings will affect the markets over the coming months. Here’s the slate of Q1 reports scheduled for this week:

That’s all for this week — let us know if there’s anything we missed by commenting below, replying to this email, or sending us a text at +1 (833) 878 9106. And if you liked this post, do us a favor and click the like button!! Best of luck to all of you in the markets this week, and thank you for reading!

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Credit to the respective teams at John Hancock Investment Group, Edward Jones, and T. Rowe Price for their research cited in this post: