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Weekly Market Review: Rebound Continues as Quarter Draws to a Close
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Weekly Market Review: Rebound Continues as Quarter Draws to a Close

The broader U.S. stock market averages were mixed on Friday, as the S&P gained nearly 2% for the week. Energy and Materials names led the way higher.

Inflationary pressures will likely continue to persist in 2022 and bring along higher interest rates.

In economic activity, IHS Markit reported that U.S. manufacturing and services activity was higher than predicted in March. Elsewhere, it was reported that new and pending home sales declined by more than expected during February. The same was reported regarding durable goods orders.

The Week Ahead

The first quarter of 2022 comes to a close on Thursday. There may be some volatility as investors clear the decks before the upcoming earnings season.

Micron (MU) and Walgreens Boots Alliance (WBA) headline the reporting calendar next week.

On the economic front, U.S. consumer confidence will be reported on Tuesday. This will be followed by the final reading of fourth-quarter GDP, 24 hours later. The PCE price index, the key inflation measure followed by the Federal Reserve, will also be announced on Thursday.

The main event will come on Friday, in the form of the March employment data. Economists are calling for the addition of 475,000 non-farm payrolls in the U.S. and for the headline unemployment rate to decline to 3.7%.

Following the snap-back recovery in stocks over the past several quarters from Pandemic lows, we believe that investment gains will be harder to come by in 2022, given a slowing growth outlook and the prospect of higher interest rates. As a result, deciding what and when to buy can be challenging for any investor. However, the fact remains that attractive investments are out there if you’re willing to dig a little deeper.

One such Energy name is worth a closer look and is our Stock of the Week.

Stock of the Week: Enterprise Products (EPD)

The company operates midstream energy assets across the U.S., including approximately 50,000 miles of pipelines.

The stock gained more than 5% last week. We believe this outperformance can continue in the first half of 2022. Here’s why:

Energy prices have surged in recent months, most recently as the battle between Russia and Ukraine has disrupted the global supply chain.

That said, Enterprise Products can prosper regardless of where commodity prices are, because 85% of its operations are fee-based. Management says that it can be paid up to seven different times, as oil and natural gas move throughout the production cycle.

The company’s operating momentum was on display back in January, when it announced 61% revenue growth in the fourth quarter of 2021 and exceeded expectations.

Another key component of the Enterprise Products story is its 7.3% dividend yield. The company boosted the payout earlier this year and can comfortably cover the dividend with its consistent cash flow.

In the meantime, the stock carries a Smart Score of 10/10 on TipRanks. This proprietary score utilizes Big Data to rank stocks based on 8 key factors that have historically been a precursor of future outperformance.

On top of the positive aspects mentioned already, the Smart Score indicates that shares have seen insider buying, in addition to improving sentiment from analysts, investors, and financial bloggers.

FYI: This is just 1 of the 20+ stocks selected for the Smart Investor portfolio. That’s where we share more detailed insights on our weekly stock picks.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >

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