Tag: Routine Market/Financial News

These 20 stocks were the biggest losers of 2022

This has been the year of reckoning for Big Tech stocks — even those of companies that have continued to grow sales by double digits.

Below is a list of the 20 stocks in the S&P 500
SPX,
-0.72%
that have declined the most in 2022.

First, here’s how the 11 sectors of the benchmark index have performed this year:

S&P 500 sector	2022 price change	Forward P/E	Forward P/E as of Dec. 31, 2021
Energy	57.8%	9.6	11.1
Utilities	-0.5%	18.8	20.4
Consumer Staples	-2.7%	20.9	21.8
Healthcare	-3.2%	17.4	17.2
Industrials	-6.7%	18.0	20.8
Financials	-12.1%	11.7	14.6
Materials	-13.4%	15.6	16.6
Real Estate	-27.7%	16.2	24.2
Information Technology	-28.8%	19.6	28.1
Consumer Discretionary	-37.4%	20.7	33.2
Communication Services	-40.4%	14.0	20.8
S&P 500	-19.2%	16.5	21.4
Source: FactSet

The energy sector has been the only one to show a gain in 2022, and it has been a whopper, even as West Texas Intermediate crude oil
CL.1,
+0.41%
has given up most of its gains from earlier in the year. Here’s why investors are still confident in the supply/demand setup for oil and energy stocks.

Looking at the worst-performing sectors, you might wonder why the consumer discretionary and communication services sectors have fared worse than information-technology, the core tech sector. One reason is that S&P Dow Jones Indices can surprise investors with its sector choices. The consumer discretionary sector includes Tesla Inc.
TSLA,
+0.70%
and Amazon.com Inc.
AMZN,
-1.17%,
which has fallen nearly 50% this year. The communications sector includes Meta Platforms Inc.
META,
-1.21%,
along with Match Group Inc.
MTCH,
+0.50%,
which is down 69% for 2022, and Netflix Inc.
NFLX,
-0.44%,
which is down 52% this year.

There have been many reasons easy to cite for Big Tech’s decline, such as a questionable change in strategy for Facebook’s holding company, Meta, as CEO Mark Zuckerberg has put so much of the company’s resources into developing a new world that most people don’t wish to enter, at least yet. Meta’s shares were down 64% for 2022 through Dec. 29.

You might also blame the Twitter-related antics and sales of Tesla shares by CEO Elon Musk for the 65% decline in the electric-vehicle maker’s stock this year. But Tesla had a forward price-to-earnings ratio of 120.3 at the end of 2021, while the S&P 500
SPX,
-0.72%
traded for 21.4 times its weighted forward earnings estimate, according to FactSet. Those P/E ratios have now declined to 21.7 and 16.4, respectively. So Tesla no longer appears to be a very expensive stock, especially for a company that increased its vehicle deliveries by 42% in the third quarter from a year earlier.

Analysts polled by FactSet expect Tesla’s stock to double during 2023. It nearly made this list of 20 EV stocks expected to rebound the most in 2023.

The worst-performing S&P 500 stocks of 2022

Here are the 20 stocks in the S&P 500 that fell the most for 2022 through the close on Dec. 29.

Company	Ticker	2022 price change	Forward P/E	Forward P/E as of Dec. 32, 2021
Generac Holdings Inc.	GNRC, -0.84%	-71.4%	13.7	30.2
Match Group Inc.	MTCH, +0.50%	-68.9%	20.1	48.5
Align Technology Inc.	ALGN, -0.52%	-67.7%	27.4	48.7
Tesla Inc.	TSLA, +0.70%	-65.4%	21.7	120.3
SVB Financial Group	SIVB, -0.38%	-65.4%	10.8	23.0
Catalent Inc.	CTLT, -0.40%	-64.6%	13.0	32.5
Meta Platforms Inc. Class A	META, -1.21%	-64.2%	14.7	23.5
Signature Bank	SBNY, -0.34%	-64.1%	6.2	18.6
PayPal Holdings Inc.	PYPL, -0.01%	-62.6%	14.8	36.0
V.F. Corp.	VFC, +0.15%	-62.5%	11.9	20.4
Warner Bros. Discovery Inc. Series A	WBD, -1.64%	-59.9%	N/A	7.5
Carnival Corp.	CCL, -0.23%	-59.8%	38.1	N/A
Stanley Black & Decker Inc.	SWK, -0.42%	-59.8%	17.0	15.9
Lumen Technologies Inc.	LUMN, -1.79%	-57.8%	7.7	7.8
Zebra Technologies Corp. Class A	ZBRA, -0.44%	-56.7%	14.5	30.1
Dish Network Corp. Class A	DISH, -0.96%	-56.5%	8.6	10.9
Caesars Entertainment Inc.	CZR, +0.24%	-55.7%	51.4	144.5
Lincoln National Corp.	LNC, +0.26%	-55.1%	3.4	6.2
Advanced Micro Devices Inc.	AMD, -0.97%	-55.0%	17.8	43.1
Seagate Technology Holdings PLC	STX, -0.55%	-53.1%	15.0	12.4
Source: FactSet

Click on the tickers for more information about the companies.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Another way of measuring the biggest stock-market losers of 2022

It is one thing to have a large decline based on the share price, but that doesn’t tell the entire story. How much of a decline have investors seen in the holdings of their shares during the year? The S&P 500’s total market capitalization declined to $31.66 trillion as of Dec. 28 (the most recent figure available) from $40.36 trillion at the end of 2021, according to FactSet.

Shareholders of these companies have suffered the largest declines in market cap during 2022.

Company	Ticker	2022 market capitalization change ($bil)	2022 price change
Apple Inc.	AAPL, -0.63%	-$851	-27.0%
Amazon.com Inc.	AMZN, -1.17%	-$832	-49.5%
Microsoft Corp.	MSFT, -1.15%	-$728	-28.3%
Tesla Inc.	TSLA, +0.70%	-$677	-65.4%
Meta Platforms Inc. Class A	META, -1.21%	-$465	-64.2%
Nvidia Corp.	NVDA, -1.37%	-$376	-50.3%
PayPal Holdings Inc.	PYPL, -0.01%	-$141	-62.6%
Netflix Inc.	NFLX, -0.44%	-$138	-51.7%
Walt Disney Co.	DIS, -1.62%	-$123	-43.7%
Salesforce Inc.	CRM, -0.96%	-$118	-47.8%
Source: FactSet

So there is your surprise for today: Apple is this year’s biggest stock-market loser.

Don’t miss: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices

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December 30, 2022

U.S. stocks close sharply higher in year-end rally after jobless claims data deemed ‘welcome news for the Fed’
U.S. stock indexes finished sharply higher on Thursday, the second-to-last trading session of the year, with the Nasdaq Composite jumping 2.6%, erasing losses from earlier in the week.

The three main indexes built on premarket gains after U.S. weekly jobless claims data showed the number of workers receiving benefits has climbed to the highest level since February, a tentative sign that the Federal Reserve’s interest-rate hikes might be slowing economic growth and inflation.
How stocks traded

The S&P 500
SPX,
+1.75%
rose 66.06 points, or 1.8%, to end at 3,849.28.

Dow Jones Industrial Average
DJIA,
+1.05%
added 345.09 points, or 1.1%, finishing at 33,220.80.

Nasdaq Composite
COMP,
+2.59%
climbed 264.80 points, or 2.6%, to finish at 10,478.09.

On Wednesday, the Nasdaq Composite dropped 1.4% to 10,213, its lowest closing level of the year. The S&P 500 is up more than 6% from its 2022 low from mid-October, but the large-cap index remains down 19.2% year-to-date, FactSet data show.

What drove markets

The penultimate session of 2022 showed tentative signs of delivering some much needed festive cheer for the stock market as a hope for “Santa Claus rally” had earlier failed to materialize.

MarketWatch Live: Is that you, Santa Claus?

Stocks advanced on Thursday as data showed the number of Americans receiving more than a single week of unemployment benefits had climbed by 41,000 last week to 1.71 million, the highest level in 10 months.

The jobless-claims data “points to a loosening in the labor market, which is welcome news for the Fed,” said Larry Adam, chief investment officer at Raymond James, in a tweet.

However, analysts at Citi still think the claims data indicates a still-very-tight labor markets compared to historical levels.

“While both initial and continuing claims increased this week, they remain within the levels of late 2019,” wrote Gisela Hoxha, U.S. economics research analyst at Citi. “Anecdotes of company layoffs have increased in recent months, particularly in the tech sector. While it could be hard to disentangle the seasonal effects from the announced layoffs, in our view there is no significant evidence of them showing up in the claims data yet.”

Some of those layoffs could be taking effect a couple months later as employees might be kept on payroll for some time after the announcement, which will become significant signs of weakness in the labor market in 2023, Hoxha added.

See: Did 2022 break Wall Street’s ‘fear gauge’? Why the VIX no longer reflects the sorry state of the stock market

Stocks were on track to finish what’s set to be the worst year since 2008 not far from 2022 lows. The S&P 500’s 52-week closing low at 3,577.03 was hit on Oct. 12.

Still, the three indexes managed to erase losses from earlier in the week on Thursday. Nasdaq Composite was down 0.2% this week, while the S&P 500 gained 0.1% and the Dow was nearly flat as of Thursday’s close. If the S&P 500 can hold on to weekly gains through Friday, it would mark the end of a three-week losing streak that has been the index’s longest since September, FactSet data show.

Companies in focus

Tesla Inc.
TSLA,
+8.08%
shares finished 8.1% higher on Thursday after posting its first rise in eight sessions Wednesday. The electric-vehicle maker’s shares had declined in seven consecutive sessions, their worst losing streak since a seven-session run that ended on Sept. 15, 2018.

Southwest Airlines
LUV,
+3.70%
remains in focus as the airline tries to recover from logistical issues that caused thousands of flight cancellations over the past week. The stock fell 11% over the past two days, but rose 3.7% in Thursday session.

General Electric’s
GE,
+2.17%
spinoff of GE HealthCare Technologies will join the S&P 500 index when it begins trading as a separate public company on Jan. 4. GE HealthCare will replace Vornado Realty Trust
VNO,
+1.63%,
which will move to the S&P MidCap 400. Vornado will replace logistics company RXO
RXO,
+8.39%,
which will move to the S&P SmallCap 600. GE HealthCare — trading on a when-issued basis — rose 0.9%, while Vornado gained 1.6% and RXO jumped 8.4%.

Cal-Maine
CALM,
-14.50%
shares ended 14.5% lower after its quarterly earnings came in below Wall Street forecasts. Cal-Maine reported record sales for the quarter as an avian flu outbreak continued to limit the supply of eggs, driving prices sharply higher. The company also said there were no positive tests for avian flu at any of its production facilities, as of Wednesday.

— Jamie Chisholm contributed to this article
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December 29, 2022
U.S. stocks close sharply higher in year-end rally after jobless claims data deemed ‘welcome news for the Fed’
U.S. stock indexes finished sharply higher on Thursday, the second-to-last trading session of the year, with the Nasdaq Composite jumping 2.6%, erasing losses from earlier in the week.

The three main indexes built on premarket gains after U.S. weekly jobless claims data showed the number of workers receiving benefits has climbed to the highest level since February, a tentative sign that the Federal Reserve’s interest-rate hikes might be slowing economic growth and inflation.
How stocks traded

The S&P 500
SPX,
+1.75%
rose 66.06 points, or 1.8%, to end at 3,849.28.

Dow Jones Industrial Average
DJIA,
+1.05%
added 345.09 points, or 1.1%, finishing at 33,220.80.

Nasdaq Composite
COMP,
+2.59%
climbed 264.80 points, or 2.6%, to finish at 10,478.09.

On Wednesday, the Nasdaq Composite dropped 1.4% to 10,213, its lowest closing level of the year. The S&P 500 is up more than 6% from its 2022 low from mid-October, but the large-cap index remains down 19.2% year-to-date, FactSet data show.

What drove markets

The penultimate session of 2022 showed tentative signs of delivering some much needed festive cheer for the stock market as a hope for “Santa Claus rally” had earlier failed to materialize.

MarketWatch Live: Is that you, Santa Claus?

Stocks advanced on Thursday as data showed the number of Americans receiving more than a single week of unemployment benefits had climbed by 41,000 last week to 1.71 million, the highest level in 10 months.

The jobless-claims data “points to a loosening in the labor market, which is welcome news for the Fed,” said Larry Adam, chief investment officer at Raymond James, in a tweet.

However, analysts at Citi still think the claims data indicates a still-very-tight labor markets compared to historical levels.

“While both initial and continuing claims increased this week, they remain within the levels of late 2019,” wrote Gisela Hoxha, U.S. economics research analyst at Citi. “Anecdotes of company layoffs have increased in recent months, particularly in the tech sector. While it could be hard to disentangle the seasonal effects from the announced layoffs, in our view there is no significant evidence of them showing up in the claims data yet.”

Some of those layoffs could be taking effect a couple months later as employees might be kept on payroll for some time after the announcement, which will become significant signs of weakness in the labor market in 2023, Hoxha added.

See: Did 2022 break Wall Street’s ‘fear gauge’? Why the VIX no longer reflects the sorry state of the stock market

Stocks were on track to finish what’s set to be the worst year since 2008 not far from 2022 lows. The S&P 500’s 52-week closing low at 3,577.03 was hit on Oct. 12.

Still, the three indexes managed to erase losses from earlier in the week on Thursday. Nasdaq Composite was down 0.2% this week, while the S&P 500 gained 0.1% and the Dow was nearly flat as of Thursday’s close. If the S&P 500 can hold on to weekly gains through Friday, it would mark the end of a three-week losing streak that has been the index’s longest since September, FactSet data show.

Companies in focus

Tesla Inc.
TSLA,
+8.08%
shares finished 8.1% higher on Thursday after posting its first rise in eight sessions Wednesday. The electric-vehicle maker’s shares had declined in seven consecutive sessions, their worst losing streak since a seven-session run that ended on Sept. 15, 2018.

Southwest Airlines
LUV,
+3.70%
remains in focus as the airline tries to recover from logistical issues that caused thousands of flight cancellations over the past week. The stock fell 11% over the past two days, but rose 3.7% in Thursday session.

General Electric’s
GE,
+2.17%
spinoff of GE HealthCare Technologies will join the S&P 500 index when it begins trading as a separate public company on Jan. 4. GE HealthCare will replace Vornado Realty Trust
VNO,
+1.63%,
which will move to the S&P MidCap 400. Vornado will replace logistics company RXO
RXO,
+8.39%,
which will move to the S&P SmallCap 600. GE HealthCare — trading on a when-issued basis — rose 0.9%, while Vornado gained 1.6% and RXO jumped 8.4%.

Cal-Maine
CALM,
-14.50%
shares ended 14.5% lower after its quarterly earnings came in below Wall Street forecasts. Cal-Maine reported record sales for the quarter as an avian flu outbreak continued to limit the supply of eggs, driving prices sharply higher. The company also said there were no positive tests for avian flu at any of its production facilities, as of Wednesday.

— Jamie Chisholm contributed to this article
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December 29, 2022
Southwest, NIO, AMC, Tesla, and More Stock Market Movers Tuesday
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https://www.barrons.com/articles/stock-market-movers-tesla-alibaba-southwest-51671810917
Updated Dec. 27, 2022 10:10 am ET / Original Dec. 27, 2022 4:48 am ET

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December 27, 2022
Asian shares rise in thin holiday trading, with U.S., European markets closed

BANGKOK (AP) — Shares rose Monday in Asia in thin post-Christmas holiday trading, with markets in Hong Kong, Sydney and several other places closed.

Tokyo’s Nikkei 225 index
NIK,
+0.65%
gained 0.6% to 26,393.32 and the Kospi
180721,
+0.15%
in Seoul added 0.2% to 2,318.54. The Shanghai Composite index
SHCOMP,
+0.65%
rose 0.5% to 3,061.93 and the SET
SET,
+0.47%
in Bangkok added 0.6%.

Bank of Japan Gov. Haruhiko Kuroda indicated in a widely watched speech Monday that the central bank does not intend to alter its longstanding policy of monetary easing to cope with pressures from inflation on the world’s third-largest economy.

Last week, markets were jolted by a slight adjustment in the target range for the yield of long-term Japanese government bonds, viewing it as a sign the Bank of Japan might finally unwind its massive support for the economy through ultra-low interest rates and purchases of bonds and other assets.

A widening gap between interest rates in Japan and other countries has pulled the Japanese yen sharply lower against the U.S. dollar and other currencies and accentuated the impact of higher costs for many imported products and commodities.

But the BOJ has kept its key lending rate at minus 0.1%, cautious over risks of recession.

Kuroda told the Keidanren, the country’s most powerful business group, that with economies facing likely downward pressure, and with Japan’s economy not fully recovered from the impacts of the pandemic, the BOJ “deems it necessary to conduct monetary easing and thereby firmly support the economy. …”

On Friday, the S&P 500
SPX,
+0.59%
reversed a 0.7% loss to close 0.6% higher, at 3,844.82. With one week left of trading in 2022, the benchmark index is down 19.3% for the year. The Dow Jones Industrial Average
DJIA,
+0.53%
rose 0.5% to 33,203.93, while the tech-heavy Nasdaq
COMP,
+0.21%
edged 0.2% higher, to 10,497.86.

Small company stocks also rose. The Russell 2000 index
RUT,
+0.39%
picked up 0.4% to 1,760.93.

Mixed economic news weighed on stocks early on, but the indexes rebounded by late afternoon amid relatively light trading ahead of the long holiday weekend. U.S. and European markets will be closed Monday.

Markets are in a tricky situation where relatively solid consumer spending and a strong employment market reduce the risk of a recession but also raise the threat of higher interest rates from the Federal Reserve as it presses its campaign to crush inflation.

The government reported Friday that a key measure of inflation is continuing to slow, though the inflation gauge in the consumer spending report was still far higher than anyone wants to see. Also, growth in consumer spending weakened last month by more than expected, but incomes were a bit stronger than expected.

Last week’s reports were the last big U.S. economic updates of the year. Investors will soon turn their focus to the next round of corporate earnings.

The Fed has said it will keep raising interest rates to tame inflation, even though the pace of price increases has continued to ease. The Fed’s key overnight rate is at its highest level in 15 years, after beginning the year at a record low of roughly zero.

The key lending rate, the federal funds rate, stands at a range of 4.25% to 4.5%, and Fed policymakers have forecast that the rate will reach a range of 5% to 5.25% by the end of 2023.

Given the persistence of high inflation, “many are starting to believe the main story is that there will be no scope for Fed cuts in the year ahead and that central banks will maintain these relatively high rates until underlying inflation is truly cracked — and that process will take time,” Stephen Innes of SPI Asset Management said in a commentary.

The Fed’s forecast doesn’t call for a rate cut before 2024, and the higher rates have raised concerns the economy could stall and slip into a recession in 2023. High rates have also been weighing heavily on prices for stocks and other investments.

In currency dealings, the U.S. dollar
DXY,
-0.10%
slipped to 132.62 Japanese yen from 132.82 yen late Friday. The euro rose to $1.0629 from $1.0614.

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December 26, 2022
U.S. stocks edge higher, aiming to end four-day skid as Bank of Japan policy surprise adds to jitters
U.S. stocks turned higher at midday Tuesday, as investors gauged whether the recent losing streak in equities has been overdone. Traders also weighed the potential rippled effects of the Bank of Japan’s surprise announcement to put a higher ceiling on government bond yields.

How are stocks are trading
- The S&P 500
  SPX,
  +0.45%
  rose 9 points, or 0.2%, to 3,814.
- The Dow Jones Industrial Average
  DJIA,
  +0.63%
  was up 114 points, or 0.3%, at 32,866.
- The Nasdaq Composite
  COMP,
  -1.76%
  was up 26 points, or 0.2%, to 10,578.
Stocks fell for a fourth straight session on Monday. The Nasdaq Composite was down 6.3% over that stretch, and has retreated 32.6% so far this year.
What’s driving markets

Wall Street is looking to avoid a fifth straight losing session, while investors weighed the implications of a surprise monetary policy shift by the Bank of Japan.

The S&P 500 closed the previous day near a six-week low as concerns intensify that central banks’ hiking of borrowing costs to combat inflation will push economies into recession and cause corporate earnings to fall.

The Bank of Japan had been an outlier among major central banks by having maintained rates at the zero lower bound, while others embarked on their biggest tightening cycle in a generation, noted Henry Allen, strategist at Deutsche Bank.

But on Tuesday the BoJ doubled the cap on the country’s 10-year bond, from 0.25% to 0.5%, causing the yen to jump more than 3%, while whacking equities in the region and giving U.S. stock investors more to consider.

See: Why the Bank of Japan’s surprise policy twist is rattling global markets

The BoJ kept its short-term interest rate at minus 0.1%, but the raising of the yield at which it will allow bonds to trade was seen as a step towards the ending of its era of ultra-loose monetary policy. The Nikkei 225
NIK,
-2.46%
fell 2.5%.

“It’s important not to underestimate the impact this could have, because tighter BoJ policy would remove one of the last global anchors that’s helped to keep borrowing costs at low levels more broadly,” Allen added.

The 10-year U.S. Treasury yield
TMUBMUSD10Y,
3.692%
stood at 3.685% as the equivalent maturity Japanese government bond
TMBMKJP-10Y,
0.417%
climbed to 0.418%.

However, some analysts argued that recent drops in U.S. stocks were starting to go too far.

“I think we’ve been oversold the last couple weeks,” Joe Saluzzi, partner at Themis Trading, said in a phone interview. There’s the macroeconomic pressures weighing on stocks, but Saluzzi said the recent run of heavy selling may also be partly attributable to year-end tax loss harvesting in order to reap tax benefits from the year’s losses.

The Bank of Japan announcement may have unsettled some early trading, he said. But ultimately, there’s just one central bank in the mind of U.S. equity investors, Saluzzi noted.

Until the Federal Reserve is clear that its own interest rate hikes are complete, markets will be choppy, Saluzzi said. “The economy is weakening. No matter what the Fed said, they are not going to be doing much more,” he said.

“U.S. equity markets remain trending lower in the short run, but are close to near-term support which should materialize between 12/21-12/23 at marginally lower levels,” wrote Mark Newton, head of technical strategy at Fundstrat, in a note to clients.

“The percentage of stocks above their 20-day moving average is nearing single-digit territory, which normally provides relief for longs. Overall, I don’t expect markets to go down much further in December, and risk/reward for trading shorts looks sub-par with SPX not far above targets at 3,725.

“This might materialize at 3775-3800 before allowing for a minor bounce, and then retest into Wednesday-Friday. However, I’m fully expecting a bounce next week into year-end, regardless if it proves temporary,” Newton concluded.

Tuesday morning data gave another window to a slowing economy. Building permits and housing starts were both down in November.

Companies in focus

3M Co.
MMM,
-0.34%
is phasing out the manufacturing of so-called “forever chemicals” like fluoropolymers, fluorinated fluids, and PFAS-based additive products by the end of 2025. The phase-out process will include taking mostly non-cash charges of $1.3 billion to $2.3 billion to exit the line of business. Shares are down 0.5% in mid-morning trading.

Wells Fargo & Co.
WFC,
-1.06%
is being ordered to pay a civil penalty of $1.7 billion and return more than $2 billion to consumers, according to the Consumer Financial Protection Bureau. The regulator said the fines and consumer redress are connected to “widespread mismanagement” of auto loans, mortgages and deposit accounts, the CFPB said. Shares were off 1.1% in mid-morning trading.
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December 20, 2022
Stock market could see ‘fireworks’ through the end of the year as headwinds have ‘flipped,’ Fundstrat’s Tom Lee says

Several headwinds that pummeled the stock market in 2022 have turned into tailwinds, setting the stage for a rally in U.S. equities heading into year-end, according to Tom Lee, head of research at Fundstrat Global Advisors.

“The Thanksgiving holiday has ended and now markets are entering the final key weeks of 2022,” said Lee, head of research at Fundstrat, in a note Monday. “While many may be tempted to ‘close the books’ for the year, we think the final 5 weeks will be ‘fireworks.’”

In Lee’s view, 11 headwinds that this year helped drive the S&P 500 index to a 2022 low in October, including surging oil prices and the Federal Reserve’s hurry to lift interest rates higher to battle soaring inflation, “have all flipped.” On Monday morning, U.S. oil was trading at the lowest price of 2022 amid protests in China over the country’s strict rules aimed at curbing the spread of COVID-19, restrictions that investors fear will hurt consumption and economic growth.

Lee said he saw the easing of inflation in October, as measured by the consumer price index, as a “game changer” for markets, with the case for “a sustainable rally in equities” being the strongest that it’s been so far this year. Here are the 2022 headwinds that Lee sees becoming tailwinds.

FUNDSTRAT NOTE DATED NOV. 28, 2022

Lee said that softer inflation seen in October appears “repeatable” and that the easing of price pressures should be “sufficient” for the Fed to slow its rapid pace of rate hikes, with December potentially being the last increase. Also, “if inflation is ‘as bad as 1980s’ I would have thought midterms would have been an incumbent massacre,” Lee said of the recent U.S. elections.

He said that other recent signals point to “a far different path forward for markets,” including “collapsing” volatility in the bond market and a relatively large decline in the U.S. dollar. Lee pointed to the plunge in the CBOE 20+ Year Treasury Bond ETF Volatility Index, saying he anticipated that a further decline would support the S&P 500 soaring to 4,400 to 4,500 by year-end.

The S&P 500 ended Friday down 15.5% for the year, but up more than 12% from its 2022 closing low on Oct. 12, according to Dow Jones Market Data.

U.S. stocks traded lower on Monday, with the S&P 500
SPX,
-1.54%
down 0.8% at around 3,995, according to FactSet data. In the bond market, 10-year Treasury yields
TMUBMUSD10Y,
3.712%
were flat at 3.69% around midday Monday, while two-year yields
TMUBMUSD02Y,
4.467%
fell about five basis points to 4.43%.

U.S. yields have recently seen a “massive decline ranking in the bottom 1% largest downside moves in the past 50-years,” said Lee. The odds are rising that 10-year and 2-year yields may be past their peaks, potentially supporting an expansion in price-to-earnings multiples in stocks, according to his note.

“Skeptics will say “growth is the problem now” and point to downside” in the S&P 500’s earnings per share, or EPS, said Lee. But the index historically has “bottomed 11-12 months before EPS troughs,” he said. “So EPS is lagging.”

Read: S&P 500 earnings estimates for 2023 take ‘complete U-turn’ as recession risks loom, according to BofA

Also see: Barclays says cash may be ‘real winner’ in 2023 while recommending bonds over stocks

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November 28, 2022
U.S. Stocks Wobble Ahead of Fed Minutes

U.S. Stocks Wobble Ahead of Fed Minutes

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November 23, 2022
Republicans clinch slim majority in House, likely signaling gridlock ahead

Republicans will take over the U.S. House of Representatives two years into President Joe Biden’s term, though their narrow majority looks set to cause headaches for GOP leaders.

Republican hopes for a strong red wave have been dashed, but the Associated Press said Wednesday that the party won enough House seats — 218 — to control that chamber of Congress, as results from the midterm elections continue to be tabulated.

The battle for the U.S. Senate went to the Democrats late Saturday. Democrats will retain their hold on the Senate after winning a key race in Nevada, giving Biden’s party control of at least one chamber of Congress for the next two years.

“Republicans have officially flipped the People’s House!” Rep. Kevin McCarthy, R-Calif., the front-runner to become House Speaker, tweeted late Wednesday. “Americans are ready for a new direction, and House Republicans are ready to deliver.”

While Republicans will control just one chamber of Congress, they now are expected to deliver a check on Biden’s policy priorities, such as by potentially using a debt-ceiling showdown to force spending cuts.

In a statement late Wednesday, President Joe Biden called for bipartisanship: “The American people want us to get things done for them. They want us to focus on the issues that matter to them and on making their lives better. And I will work with anyone — Republican or Democrat — willing to work with me to deliver results.”

Related: Democrats weigh end run around Republicans to raise debt limit

And see: Republican lawmakers likely to target ‘woke capitalism’ after the midterm elections, analysts say

The Republican House majority has yet to be finalized but could be the narrowest of the 21st century, even less than in 2001, when the GOP had a nine-seat majority with two independents.

Washington is likely to face new periods of gridlock, with Democrats also keeping their hold on the White House since Biden still has two years to serve before the 2024 presidential election. That’s after Democrats in the past two years used party-line votes to push through measures such as March 2021’s stimulus law and this past summer’s package targeting healthcare, climate change and taxes.

The House switching to red from blue fits the historical pattern in which a first-term president’s party tends to lose congressional ground in the midterms. The GOP highlighted raging inflation in its effort to win over American voters.

The House seats to flip to the GOP included one held by Democratic Rep. Elaine Luria of Virginia, who lost to Republican challenger Jen Kiggans, as well as two seats in Florida. But Democrats also flipped House seats and won re-elections in bellwether races, with Virginia Rep. Abigail Spanberger and Indiana Rep. Frank Mrvan notching victories.

Read more: Here are the congressional seats that have flipped in the midterm elections

Democrats have had a grip on the House since the 2018 midterms. They’ve run the Senate for two years, controlling the 50-50 chamber only because Vice President Kamala Harris can cast tiebreaking votes.

Among the competitive Senate races, Democrats kept their hold on seats in Arizona, Colorado and New Hampshire, while scoring a pick-up in Pennsylvania. Republicans maintained their control of seats in North Carolina, Ohio and Wisconsin.

Georgia’s Senate contest is headed to a Dec. 6 runoff, but its outcome has become less significant.

Related: Ohio’s J.D. Vance tells MarketWatch he wants to end tax loopholes for tech companies and ban congressional stock trading

Betting markets since late on Election Day have been seeing Democrats staying in charge of the Senate and Republicans winning the House. Ahead of last Tuesday’s voting, betting markets had signaled confidence in GOP prospects for taking over both the Senate and House.

Analysts had said voters last month appeared increasingly focused on Republican issues such as high prices for gasoline
RB00,
-0.35%
and other essentials, at the expense of Democrats’ agenda items such as climate change and abortion rights.

But exit polls suggested that Republicans performed worse than expected because many Democrats and independents voted partly to show their disapproval of former President Donald Trump — and those voters were energized by the Supreme Court’s Dobbs decision that overturned Roe.

See: Anti-Trump vote and Dobbs abortion ruling boost Democrats in 2022 election

The former president announced his 2024 White House run late Tuesday. Earlier Tuesday, House Republicans chose Rep. Kevin McCarthy of California, the current minority leader, as their candidate for speaker. Thirty-one Republicans voted against McCarthy, signaling that he must shore up his support before the vote on the speakership takes place in January. It’s an early sign of how Republicans’ narrow majority is creating turbulence for the House GOP leadership.

Now read: What a Republican-controlled House might mean for tech: Plenty of hand-wringing over Section 230 liability shield

And see: DeSantis viewed as frontrunner for Republican 2024 presidential nomination after Trump’s candidates flop in midterm elections

Plus: Senate Republicans pick Mitch McConnell as their leader, as Rick Scott’s challenge flops

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November 16, 2022
Dow ekes out gain, stocks end higher on signs of easing inflation, but Russia’s war in Ukraine intensifies
U.S. stocks closed higher Tuesday, but off the session’s best levels, after more data suggested inflation may be slowing and mega-retailer Walmart offered a rosier annual forecast.

The Dow turned negative earlier in the session after the Associated Press reported that Russian missiles crossed into Poland and killed two people, ratcheting up geopolitical tension given Poland is a NATO country.
How stocks traded
- S&P 500 index
  SPX,
  +0.87%
  rose 34.48 points, or 0.9%, to close at 3,991.73.
- Dow Jones Industrial Average
  DJIA,
  +0.17%
  climbed 56.22 points, or 0.2%, ending at 33,592.92, after touching a nearly three-month high of 33,987.06 earlier.
- Nasdaq Composite
  COMP,
  +1.45%
  climbed 162.19 points, or 1.5%, closing at 11,358.41.
On Monday, U.S. stocks finished near session lows after early gains evaporated. The Dow Jones Industrial Average fell 211 points, or 0.6%, while the S&P 500 declined 36 points, or 0.9% and the Nasdaq Composite dropped 226 points, or 2%.

What drove markets

U.S. stocks closed higher Tuesday, after another batch of inflation data showed that whole prices rises were slowing in October for the second straight month.

The Dow’s brief negative turn came after reports that Russian military bombarded Ukraine Tuesday. In the attack, missiles reportedly crossed into Poland, a member of NATO, the Associated Press said, citing a senior U.S. intelligence official.

“Geopolitical concerns obviously are never positive for the market,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

On Tuesday, oil futures settled higher. West Texas Intermediate crude for December delivery rose to $1.05, or 1.2%, reaching $86.92 a barrel.

While markets had started to price in the toll of Russian’s nearly nine-month invasion of Ukraine, it had not priced in an potential escalation of the war, said Kent Engelke, chief economic strategist at Capitol Securities Management.

“Talk about geopolitical angst returning,” Engelke said, later adding, “If there were really missiles shot to Poland and that was really not an accident, wow, that is really increasing the scope of the war.”

A U.S. National Security Council spokesperson said the agency was aware of the news reports out of Poland, but that it cannot confirm the reports or any details at this time.

While international worries clouded the session, there was also encouraging domestic news.

The U.S. producer-price index climbed 8% over the 12 months through October, the Labor Department said Tuesday, easing from September’s revised 8.4% increase. Last week, stocks surged after the October consumer-price index rose more slowly than expected.

See: Wholesale prices rise slowly again and point to softening U.S. inflation

Tuesday’s PPI report helped support the notion that inflation has peaked, at least for now.

“Today, it’s really about the PPI and the market reaction to it,” Steve Sosnick, chief strategist at Interactive Brokers
IBKR,
+3.45%,
said in a Tuesday morning interview before the reports of missiles crossing into Poland.

Markets ripped higher last Thursday after October’s consumer-price index showed signs of easing. The same dynamic was playing out Tuesday, but the response now has been “a bit more muted” because it’s an iteration on inflation data that investors already had been starting to see, Sosnick said.

So, is the economy really at peak inflation? It’s too early to say for sure, according to Sosnick. Still, the PPI numbers, paired with last week’s CPI reading “does add evidence to that narrative,” he added.

Walmart’s third quarter earnings also were buoying markets, Sosnick said. The massive retailer’s beat on earnings offers a glimpse at the minds and wallets of many American consumers. For anyone who worries about consumers “getting highly defensive” and not spending, Walmart’s numbers are “counter evidence.”

In other news, the first face-to-face meeting between President Joe Biden and President Xi Jinping helped support stocks listed in China and Hong Kong, as some of the tensions between the world’s two largest economies were seen to be easing.

The upbeat tone from Asia, which included Taiwan Semiconductor Manufacturing Company
TSM,
+10.52%
jumping 7.7% on news Warren Buffett had bought a $5 billion stake, underpinned European bourses, which closed higher for a fourth session in a row.

Read also: Warren Buffett’s chip-stock purchase is a classic example of why you want to be ‘greedy only when others are fearful’

Analysts increasingly expect stocks to enjoy a positive end to the year. “The near-term picture still looks positive for U.S. benchmark indices and while momentum has reached intra-day overbought levels, this doesn’t imply a selloff has to happen right away,” said Mark Newton, head of technical strategy at Fundstrat.

Philadelphia Federal Reserve President Patrick Harker said Tuesday that he favored a 50 basis-point hike to the Fed’s benchmark rate in December. Atlanta Fed President Raphael Bostic said more rate hikes will be needed, even through there have been “glimmers of hope” on inflation.

Fed Vice Chairman for Supervision Michael Barr said Tuesday that the U.S. economy is likely to slow in coming months, and more workers will lose their jobs, in Senate testimony. The Fed is working with regulators to assess risks tied to cryptocurrency markets, following the collapse of FTX and its associated companies.

In other U.S. economic data, the New York Empire State manufacturing index for November showed a gauge of manufacturing activity in the state rose 13.6 points to 4.5 this month.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.774%
was down 6.7 basis points at 3.798%. Bond yields move inversely to prices.

Companies in focus
- Walmart
  WMT,
  +6.54%
  shares jumped after the giant retailer swung to a net third-quarter loss, due to $3.3 billion in charges related to opioid legal settlements, but reported adjusted profit, revenue and same-store sales that were well above expectations and a full-year outlook that was above forecasts. Walmart shares opened Tuesday at $145.61 and closed at $147.48, or 6.57% higher.
- Home Depot
  HD,
  +1.63%
  rose after the home improvement retailer reported fiscal third-quarter earnings that beat expectations, citing strength in project-related categories, but kept its full-year outlook intact. Home Depot shares opened Tuesday at $304.06 and closed at $311.99.
- Chinese-listed technology traded sharply higher on Tuesday, including U.S.-traded ADRs for Alibaba Group Holding
  BABA,
  +11.17%,
  Baidu Inc.
  BIDU,
  +9.02%
  and JD.com Inc.
  JD,
  +7.14%
  The KraneShares CSI China Internet exchange-traded fund
  KWEB,
  +9.56%
  also traded substantially higher.
—Jamie Chisholm contributed reporting to this article
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November 15, 2022
Alibaba, Tencent, lead Hong Kong tech stocks higher after upbeat China online retail sales data

Shares of Chinese internet giants jumped in Hong Kong, after official data showed better-than-expected October retail sales in the world’s second-largest economy.

Alibaba Group Holding Ltd.
BABA,
+0.79%

9988,
+10.63%
jumped 9.8%, Kuaishou Technology
1024,
+10.71%
surged 8.7%, Tencent Holdings Ltd.
700,
+10.28%
rose 8.0% and Meituan
3690,
+5.88%
was up 5.8%. The Hang Seng Tech Index
HSXTCHINDXXX,
+7.08%
has gained as much as 7.7% and was last up 6.1%

The sector’s sharp upturn came after China’s National Bureau of Statistics said online retail sales of physical goods rose 7.2% in the first 10 months of the year. The number, closely watched by investors as an indicator of the country’s consumption trends, outpaced a 6.1% rise in the January-to-September period.

Jefferies analysts estimate that online retail sales grew more than 15% in October, accelerating from the three consecutive months of below-10% growth seen since July.

Write to Yifan Wang at yifan.wang@wsj.com

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November 14, 2022
Bitcoin falls to 2-year low, other cryptos down after market reacts to FTX bankruptcy news

FTX, the crypto exchange, filed for voluntary Chapter 11 bankruptcy in a Delaware court on Friday, and chief executive Sam Bankman-Fried has resigned.

Following the news, here is how prices are doing for major cryptocurrencies, according to CoinDesk data.

Bitcoin BTCUSD, -4.92% The price for Bitcoin was around $19,350 before the announcement of the potential FTX/Binance deal on Tuesday. The price jumped to $20,590 in less than an hour after the announcement. But dropped to a 2-year low of $17,484. Currently, the Bitcoin price is $16,907.19, a change of -5.04% over the past 24 hours.

Ethereum ETHE, -9.66% Currently, the Ethereum price is $1,252.60, a change of -6.60% over the last 24 hours. The price of Ethereum was around $1,438 before the announcement, and peaked at $1,562 under an hour after. Later on Nov 8, the price dropped to $1,289.

FTT: Today the price of FTT, which is the FTX token, is $2.74, down 20.37% in the last 24 hours, according to CoinMarketCap data. At the beginning of the week, on Nov 7, the price was around $22.06.

Solana: Currently, the price is $17.34, a change of 2.91% over the past 24 hours. The price of Solana before the announcement was around $27.69, and peaked at $31.29 shortly after the announcement.

Binance Coin: The Binance Coin price is $285.74, a change of -7.02% over the past 24 hours. The Binance Coin price was around $322 before the announcement that Binance might acquire FTX on Nov 8.

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November 11, 2022
Is the stock market open? Veterans Day is a regular day for U.S. stocks, but the bond market is closed.

The stock market remains open Friday, Nov. 11, the Veterans Day holiday in the U.S., even through it counts as a holiday for the $53 trillion American bond market.

That means a full day of trading for stocks, which appear poised to book a robust week of gains, despite continued fears of a potential U.S. economic recession as the Federal Reserve works to tame stubbornly high costs of living.

Signs of a potential cooling off on the inflation front led the Dow Jones Industrial Average
DJIA,
+3.70%
to advance 1,200 points on Thursday, with it, the S&P 500 index
SPX,
+5.54%
and Nasdaq Composite Index
COMP,
+31.35%
all booking their best daily gains since 2020.

Don’t miss: Veterans Day: Are banks open? Does USPS deliver mail?

While Friday marks the start of a three-day weekend for the bond market, Treasury yields already have climbed dramatically this year with the Fed’s sharp rate hikes. The central bank aims to temper demand for goods and services by making borrowing costs more restrictive.

Consumers may feel certain effects of inflation in their everyday lives, like when they go to the grocery store. But it can also impact our savings and investments. Here’s what to know.

The benchmark 10-year Treasury rate
TMUBMUSD10Y,
3.819%
fell to about 3.8% on Thursday, but was up from a 1.3% low last December. Bond yields move in the opposite direction of prices.

The fresh rally on Wall Street followed the consumer-price index reading for October showing a 7.7% annual rate, down from a 9.1% high in June. The Dow remains down more than 8% from its January peak, the S&P 500 is 17.5% lower and the Nasdaq is 31% below its last record close, according to Dow Jones Market Data.

Veterans Day was born out of the wreckage of World War I, with Nov. 11 recognized as a legal holiday in the U.S. in 1938, two decades after an armistice between the Allied nations and Germany went into effect at the 11th hour of the 11th day of the 11th month.

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November 11, 2022
Apple earnings beat as record back-to-school Mac sales outweigh a slight miss on iPhones

At the end of a woeful week for Big Tech earnings, Apple Inc. managed to top expectations on revenue and earnings with the help of Macs selling at a record pace during the back-to-school season, which outweighed a slight miss on iPhone sales.

Apple
AAPL,
-3.05%
shares bounced between slight gains and losses in after-hours action Thursday, even as executives projected that revenue growth could slow in the holiday quarter. As has been the case throughout the COVID-19 pandemic, Apple executives declined to offer a traditional financial forecast, but Chief Financial Officer Luca Maestri told investors on a conference call that they expect a sequential slowdown in growth during the December quarter, driven in part by sharp currency impacts, tough comparisons for the Mac business and pressures on the services business.

The smartphone giant’s revenue grew 8% in its fiscal fourth quarter, to $90.1 billion from $83.4 billion a year earlier, and came in ahead of the FactSet consensus of $88.7 billion. Apple generated $42.6 billion in its biggest business, iPhone sales, up from $38.9 billion a year before, but analysts were projecting $43.0 billion.

A big driver of the upside came from Apple’s
AAPL,
-3.05%
Mac segment, which posted a massive beat even as iPhone sales came up light. The Mac business set an all-time quarterly revenue record at $11.5 billion in the back-to-school quarter, up from $9.2 billion a year before and easily above the FactSet consensus, which called for $9.3 billion.

Chief Executive Tim Cook explained on the call that the Mac category benefited from the launch of the MacBook Air with Apple’s custom M2 chip, as well as easing supply constraints that allowed Apple to meet a prior demand backlog. Maestri said he expects that Mac revenue will “decline substantially” on a year-over-year basis in the December quarter, however, as that period faces tough comparisons.

A key question coming into Apple’s report was how demand for the company’s new iPhone 14 line has held up, especially given reports that the company has scaled back earlier production goals. Cook shared that while it was still early, “consumer demand was strong and better than we anticipated that it would be.”

The company is supply-constrained on the iPhone 14 Pro and iPhone 14 Pro Max models, Cook said, adding that it is difficult for the company to “determine the accurate mix” of its phones until it is able to fulfill all of its demand.

Revenue performance across Apple’s product lines was mixed. While Mac sales were strong, iPad revenue fell to $7.2 billion from $8.3 billion, whereas analysts were modeling $7.8 billion in iPad revenue. That category saw “opposite” trends relative to the Mac business in that iPads were up against an “exceptionally strong iPad quarter” from a year before that included a product launch.

The company raked in $9.7 billion in revenue across its wearables, home and accessories category, up from $8.8 billion in the same period a year ago. Analysts had expected revenue of $9.2 billion.

Services revenue climbed to $19.2 billion from $18.3 billion but fell short of the FactSet consensus, which was for $20.0 billion. Maestri shared that while he expects the segment to grow in the December quarter, the business could be impacted by pressures on advertising and gaming, as well as foreign-exchange effects.

For the latest quarter, Apple recorded net income of $20.7 billion, or $1.29 a share, compared with $20.6 billion, or $1.24 a share, in the year-earlier period. Analysts tracked by FactSet were expecting $1.27 a share in earnings.

If Apple’s stock managed to hold gains through Friday’s close, it would likely be the only Big Tech company to see positive post-earnings stock performance this week. Shares of Microsoft Corp.
MSFT,
-1.98%,
Alphabet Inc.
GOOG,
-2.34%

GOOGL,
-2.85%,
and Meta Platforms Inc.
META,
-24.56%
each posted sharp declines in the session after their respective reports, and Amazon.com Inc.
AMZN,
-4.06%
shares were off 12% in late trading Thursday.

Shares of Apple have lost 18% so far this year, as the Dow Jones Industrial Average
DJIA,
+0.61%
— which counts Apple as one of its 30 components — has declined 12%.

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October 27, 2022
Nasdaq closes at 2-year low after stocks fail to shake off Fed rate-hike gloom
AP

U.S. stocks finished with losses on Monday, sending the Nasdaq Composite to its lowest close in more than two years, after investors failed to shake off worries about further Federal Reserve rate hikes and JPMorgan Chase & Co.’s Jamie Dimon warned of a potential 20% decline in the S&P 500.
How stocks traded

The Dow
DJIA,
-0.32%
closed down by 93.91 points, or 0.3% at 29,202.88.

The S&P 500
SPX,
-0.75%
finished down by 27.27 points, or 0.8%, at 3,612.39.

The Nasdaq Composite gave up 110.30 points, or 1%, to end at 10,542.10 — the lowest close since July 28, 2020.

Monday’s declines exacerbated losses which occurred at the end of last week. On Friday, the Dow fell 630 points, or 2.1%, the S&P 500 declined 2.8%, and the Nasdaq Composite dropped 3.8%. The Nasdaq Composite was down 31.9% for the year to date through Friday.

What drove markets

Major indexes finished lower for a fourth consecutive session on Monday as concerns about additional rate hikes by the Fed continued to damp sentiment. Dow industrials, the S&P 500 and the Nasdaq all fell to session lows after a CNBC interview with Dimon, chief executive of JPMorgan
JPM,
-0.93%,
who said the S&P 500 could fall by “another easy 20%” from current levels.

Read: Here are the 5 times traders and stock-market investors got fooled by Fed ‘pivot’ hopes in past year

Soft data a week ago had raised hopes that the Fed would soon pause its monetary tightening cycle in its battle to suppress multidecade high inflation, and the market subsequently rebounded off its near two-year lows. But a strong jobs report on Friday crushed that Fed “pivot” narrative and stocks plunged again.

On Monday, the CBOE Vix index
VIX,
+3.48%,
a gauge of expected S&P 500 volatility, sat at 32.15, well above its long-term average of 20.

“The low interest-rate environment forced investors to chase yield and bid up the asset prices too high. Eventually the market is fair and asset values have to achieve some sense of common ground or base level valuation. So it was inevitable that this valuation correction would happen,” said Siddharth Singhai, chief investment officer for New York-based hedge fund IronHold Capital.

“Panic will swing the market towards excessive pessimism and then the valuations will be too cheap. That hasn’t happened yet. Upcoming rate hikes will most likely be a catalyst for panic, however,” he wrote in an email to MarketWatch on Monday.

Coming into Monday’s session, trading had been expected to be somewhat thinned by the Columbus Day and Indigenous People’s Day holiday, which closed the Treasury market.

Now, traders are looking toward more data later in the week for further guidance on Fed thinking and equity valuations. The U.S. producer price numbers will be released on Wednesday and the consumer prices report on Thursday, the last of their kind before the Fed’s policy decision on Nov. 2.

Then on Friday, third-quarter corporate earnings season really kicks into gear when big banks like JPMorgan
JPM,
-0.93%
and Citigroup
C,
-1.40%
present their numbers.

Read: JPMorgan, Citi, Morgan Stanley and Wells Fargo kick off bank earnings season in choppy waters and S&P 500 would be in an ‘earnings recession’ if not for this one booming sector — but that may not last long

Investors were also keeping an eye on the strong U.S. dollar, which is considered a drag on the earnings of U.S. multinationals. The dollar index
DXY,
+0.25%
rose 0.3% to 113.12 as the euro intermittently broke below $0.97 after Russia sent missiles into cities across Ukraine.

See: A rampaging U.S. dollar is wreaking havoc in financial markets. Here’s why it’s so hard to stop it.

“We expect a lot more volatility in markets for the remainder of the year as the inevitability of higher rates sinks in and the economic consequences become more pronounced,” said Arthur Laffer Jr., president of Nashville-based Laffer Tengler Investments. Fed Chairman Jerome Powell “will not be a very popular person but it seems his legacy is focused on fighting any resurgence of 1970s inflation in the U.S. at all costs.”

Companies in focus

Rivian Automotive Inc.
RIVN,
-7.28%
intends to recall about 13,000 vehicles due to a possible safety issue that has so far been found to have affected several units, the company said Friday night. Shares finished down by 7.3%.

Tesla Inc.
TSLA,
-0.05%
reported record monthly sales of China-made electric vehicles in September, as it continues to ramp production in the world’s number-two economy. The electric-vehicle maker delivered 83,135 EVs from its Shanghai plant in September, an 8% rise from August, according to a report by the China Passenger Car Association. Tesla shares nonetheless finished down by less than 0.1%.

–— Jamie Chisholm contributed to this article.
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October 10, 2022
U.S. stocks finish choppy session with losses, snap 2-day winning streak as investors assess positive economic data
U.S. stock indexes ended modestly lower on Wednesday, despite briefly turning positive in the final hour of trading, while data showed steady growth in private-sector jobs and in the service sector, indicating more scope for the Federal Reserve to continue to raise interest rates.

How stocks traded?
- The Dow Jones Industrial Average
  DJIA,
  +0.03%
  lost 42.45 points, or 0.1%, to finish at 30,273.87
- The S&P 500
  SPX,
  +0.21%
  was off 7.65 points, or 0.2%, ending at 3,783.28
- The Nasdaq Composite
  COMP,
  +18.82%
  shed 27.77 points, or 0.2%, to end at 11,148.64
On Tuesday, the Dow jumped 825 points, or 2.8%, while the S&P 500 increased 3.1% and the Nasdaq Composite rallied 3.3%.
What drove markets?

Wall Street stocks finished in the red after three main indexes bounced back from earlier losses in the final hour of trade, following a strong September private employment report in the morning.

Data released Wednesday showed that private-sector payrolls rose by 208,000 in September, indicating steady growth and supporting the view that the Fed has enough scope to keep raising interest rates. Economists surveyed by The Wall Street Journal had expected a rise of 200,000.

The report came two days before the closely watched nonfarm payrolls data issued by the Bureau of Labor Statistics. Investors are eying on it for important guidance on the Fed’s policy stance in the November meeting.

Friday’s employment report is expected to show the economy added 275,000 jobs in September, compared with 315,000 new positions added in August, according to a survey polled by Dow Jones.

See: Hiring and job creation seen falling to a 1 1/2-year low in U.S. September jobs report

“That certainly could move the needle,” said Kristina Hooper, chief global market strategist at Invesco. “Again, it doesn’t mean that it actually is going to change the market, but it could be the catalyst for short term rally if we get a disappointing jobs report.”

“But keep in mind, that’s just the anticipation of a Fed pivot based on data. But that does not ensure a Fed pivot. And so it could be one of those short-term rallies like the one we saw earlier this week,” Hooper said.

In other data Wednesday, an ISM barometer of U.S. business conditions in the service sector dipped to 56.7% in September but still showed steady growth and rising employment in a sign the economy is still expanding.

The U.S. trade deficit in August fell to $67.4 billion, the lowest level since mid 2021, paving the way for a resumption of growth in gross domestic product in the third quarter.

See: Why investors shouldn’t expect a break from the stock-market whiplash, says this strategist

The S&P 500 had just enjoyed its largest two day percentage gain since April 2020 on Monday and Tuesday, and the best start to a quarter since 1938, according to Dow Jones Market data.

The bounce followed three quarters of declines, the worst such run since 2008, during which time the S&P 500 fell 24.8% to a near two-year trough as investors worried that the Federal Reserve’s interest rate hikes to crush inflation would harm the economy.

Brian Mulberry, client portfolio manager at Zacks Investment Management, believes the volatility in the stocks will continue because markets are getting a very “consistent message” from the Fed.

“Given what has happened over the last five trading sessions alone, we would be basically telling our clients to tighten your seatbelt a little bit because it’s definitely going to continue to be a bumpy ride,” Mulberry told MarketWatch in a phone interview on Wednesday. “If we get a ‘Goldilocks’ (jobs) report, that would mean decent economic activity is going on. That’s good for earnings overall in the market, but it’s not growing to a point where interest rates would have to be ratcheted up another 125 basis points by the end of the year.”

See: The stock market is surging as the U.S. dollar retreats. It’s all about bonds.

One major reason behind the rise early this week was the view that the Fed would pivot away from its aggressive monetary tightening.

Johanna Chua, chief Asia economist at Citi, said that though U.S economic growth remained in better shape than other countries and Fed officials continued to sound hawkish, the market risked being wrongfooted by any signs that interest rates could soon peak.

“Even as the overall fundamental setup has not changed… trimming of bearish risk/bearish rates/bullish USD positions has driven a sharp reversal,” Chua said.

Mary Daly, president of the Federal Reserve Bank of San Francisco said Wednesday that the Federal Reserve needs to keep raising its benchmark interest rate in order to cool inflation that hit a 40-year high earlier this year and has shown little signs of cooling. Atlanta Fed President Raphael Bostic will speak at 4 p.m. Eastern.

Meanwhile, the OPEC+ group said Wednesday that it will reduce its collective crude production levels by 2 million barrels a day starting next month, the biggest cut since the start of the pandemic. Oil futures headed higher with West Texas Intermediate crude for November delivery
CL00,

CLX22,

rose $1.24, or 1.4%, to settle at $87.76 a barrel on the New York Mercantile Exchange.

The S&P 500’s energy sector
SP500.10,
-0.07%
rose 2.1% following the news, up 12.6% over the last three trading days. According to Dow Jones Market Data, it was the best three-day percentage gain since November 2020 when it gained 16.1%. Shares of Schlumberger
SLB,
+0.77%
gained 6.3% at the close, while Exxon Mobil
XOM,
+1.32%
shares advanced 4%.

Companies in focus

Shares of Helen of Troy Ltd.
HELE,
-2.75%
finished 3.4% higher Wednesday, after the consumer products company, with brands including OXO, Hydro Flask and Braun, reported fiscal second-quarter earnings that beat expectations but cut its full-year outlook, as rising inflation has prompted consumers to change their spending patterns.

Shares of Monopar Therapeutics Inc.
MNPR,
+6.36%
gained 1.8% after the company said it completed enrollment in a Phase 2b clinical trial evaluating its experimental therapy aimed at preventing severe oral mucositis in patients undergoing chemoradiotherapy for oropharyngeal cancer.

Shares of Eiger BioPharmaceuticals Inc.
EIGR,
+0.85%
tumbled 5% after the company said it will not pursue emergency authorization of its experimental treatment for mild and moderate COVID-19 infections.

Shares of Lamb Weston Holdings Inc.
LW,
+2.45%
ended 4.2% higher Wednesday, after the potato supplier reported fiscal first-quarter profit that beat expectations, higher prices helped offset a volume decline.

—Jamie Chisholm contributed reporting
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October 5, 2022