MarketBeat Week in Review – 2/6 - 2/10

Key Points

• Markets are closing the week looking for direction.  
• Belief that the Federal Reserve can engineer a soft landing for the economy is beginning to fade. 
• Institutional investors may be starting to price in a Fed funds rate of 6% with no pivot by the end of the year.  
• Next week, investors will get the next reading on the consumer price index (CPI); a hot number on either side could send the market sharply higher or lower. 
• Here are some of the top stories our analysts were writing this week.  

Markets are closed the week looking for direction. The rally that began in January continued into the beginning of the week, but on Wednesday and Thursday, stocks reversed course. The belief that the economy could arrive at a soft landing is eroding, and the markets are now trying to price equities for a Fed funds rate that could hit 6% before the end of the year.

Next week will bring the latest reading on consumer prices when the January CPI index is released on Tuesday. Investors will also get a read on retail sales. And more corporate earnings will come in as we reach the peak of this quarter’s earnings season. As always, you can count on the MarketBeat team to stay on top of the news that affects the markets. Here are some of the top stories they were following this week.  

Articles by Jea Yu 

Is artificial intelligence the next big thing or the next bubble? That’s a question for another day, but right now AI stocks are red hot, and Jea Yu was all over this sector with several articles this week. Yu wrote about the opportunity in C3.ai, Inc. NYSE: AI which is launching its C3 Generative AI Product Suite in March.

For investors looking for a diamond in the rough, Yu suggests looking at BigBear.ai Holdings Inc. NASDAQ: BBAI which provides AI and machine learning solutions and recently signed a 10-year procurement agreement with the U.S. Air Force that will allow the company to bid for work along with firms such as Palantir Technologies Inc. NYSE: PLTR.

And Yu also wrote about SoundHound AI Inc. (NASDAQ: SOUN) as a company to watch in the area of Voice AI if you can get past the idea of investing in a company that was part of the SPAC craze. Of course, if you still want to learn more about ChatGPT, Yu also suggests you may want to pick up shares of Microsoft Corporation NASDAQ: MSFT.  

Articles by Thomas Hughes 

If President Biden’s State of the Union address is any indication, the semiconductor sector may also be a good place for investors to look for gains in 2023. Thomas Hughes wrote about ONSemi NASDAQ: ON which reported earnings. Hughes says the company’s stock chart is pointing to much higher share prices ahead, but the company did report softer guidance than expected.

For investors looking to stick to more tried-and-true defensive stocks, Hughes writes about PepsiCo Inc. NYSE: PEP and why a recent pullback in price may create a buying opportunity for investors.

Earnings season always brings a new round of analysts' ratings. Hughes wrote about the three stocks that received the most upgrades from analysts in January. When analysts issue upgrades, institutional money is not usually far behind. So now is a good time to consider these stocks.  

Articles by Sam Quirke 

Sam Quirke had the tech sector in his sights, and if you’re an investor in the sector you know that the tech sector frequently follows the lead of Apple Inc. NASDAQ: AAPL. Quirke wrote about the price activity in Apple stock since the company reported earnings. The takeaway is that, for now, the market is shrugging off macroeconomic concerns, which is keeping a floor on the stock.

If you’re looking for a comeback story in tech, Quirke suggests your options may be as simple as investing in Amazon.com Inc.  NASDAQ: AMZN which has had a great start to the year, and analysts see more upside for the stock. Another option for investors hunting for bargains may be Take-Two Interactive Software, Inc. NASDAQ: TTWO. As Quirke notes, the company’s most recent earnings report has given the stock a firm base to send the stock higher. 

Articles by Chris Markoch 

Chris Markoch was looking into the biotech sector and gave investors one large-cap and one small-cap name to consider. On the large-cap side, Markoch wrote about investors ho-hum response to Merck & Co., Inc. NYSE: MRK after the company posted a double beat on earnings.

The company’s full-year earnings guidance was weak, but for many investors, this will be all about the pipeline. As a small-cap stock, Markoch wrote about the recent investors interest in Vaccinex, Inc. NASDAQ: VCNX after the company received a patent for its clinical-stage cancer treatment.

But like all penny stocks, investors should expect volatility even if they believe this is a hidden gem. One stock that looks like its value could be hiding in plain sight is Enphase Energy Inc. NASDAQ: ENPH. The stock fell despite strong earnings after guidance (there’s that word again) disappointed investors. Still, as a stock that’s down 35% from its all-time high, ENPH stock may be giving investors a second chance.  

Articles by Kate Stalter 

2023 is widely expected to be a year when companies face an earnings recession. So when you find stocks that analysts are saying are likely to raise earnings for the year, it’s worth your time to pay attention. Fortunately, Kate Stalter has made that easy by writing about three stocks that will be growing earnings this year according to analysts.

Stalter was also writing about recent economic data from the U.S. Energy Information Agency (EIA) that suggests strong growth in solar energy capacity this year. And she provides three solar stocks to help you capitalize on that trend. Next week, investors will get a read on retail sales for January. But Stalter gives you a head start on your research by pointing out the recent price action in TJX Cox. NYSE: TJX which suggests the broad retail rally that started in October may continue.  

Articles by MarketBeat Staff 

The on-again, off-again relationship that investors have with Beyond Meat NASDAQ: BYND is moving out of the friend zone once again. As our staff points out, shares of BYND stock are up sharply to start the year. However, caution is still warranted. This may be more of a momentum play than a long-term bullish reversal. Investors soured on The Clorox Co. NYSE: CLX after the consumer-fueled run on bleach normalized in 2022.

But CLX stock is up and investors looking for a defensive stock to hide out in may find CLX stock to be an attractive option. But if your investment philosophy is on the more aggressive side of the spectrum, our staff gives you three speculative growth stocks that are outperforming the market and turning back the clock and behaving like it’s a repeat of 2020.