Stock market mixed with lower home prices, wicked storms; China Stock Rise; smashed tesla

TECHNOLOGY
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The stock market traded mixed on Tuesday morning, with home prices falling and showing no signs that a Santa rally is coming. China’s retail stocks soared after the Asian country said it would reopen its borders next month following lengthy Covid shutdowns. tesla (TSLA) dropped in China’s vehicle registration data.




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The Nasdaq composite was down 0.9%, while the S&P 500 was down 0.1%. The Dow Jones Industrial Average was up 0.5%. The small-cap Russell 2000 Index was down 0.1%.

The Nasdaq composite and the S&P 500 are trading at their lowest levels since early November. Last week marked the third straight week of declines for the Nasdaq and S&P, but the Dow surprised with a 0.9% gain.

Volume was down on the Nasdaq and NYSE versus same time on Friday before the holiday weekend. This week’s volume is expected to be light as many traders take a week off between Christmas and New Years.

The benchmark 10-year Treasury note yield rose six basis points to 3.81%. Crude oil prices rose 0.4% to $79.90 a barrel.

The Innovator IBD 50 ETF (FFTY) gained 0.1%, led by footwear retail stocks crocs (CROX) and outdoor deckers (COVERED AREA). Crocs stock is stretched beyond the profit-taking zone, while Deckers is forming a cup-shaped base with a buy point of 402.42.

Santa’s rally didn’t come, but retail sales increased

The S&P CoreLogic Case-Shiller national home price index, which measures average home prices in major cities, fell 0.5% in October compared with September. This marked the fourth consecutive month-to-month decline. But the index fell less than Econoday’s consensus estimate for a 1.2% drop.

In the annual comparison, the index rose 9.2% in October, below the annual rate of 10.7% in September. The rise in mortgage rates was seen as a brake on homebuyers’ appetites.

“House prices continue to fall as mortgage rates continue to rise. The Federal Reserve is singularly focused on inflation and will continue to raise interest rates until it feels that inflation is falling back to its 2 %,” said Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance. “For most of the economy, rising interest rates take time to kick in, but housing is one of the parts of the economy that is most directly affected as higher Fed Funds rates quickly translate into interest rates. higher mortgage.”

While the Santa stock market rally has yet to appear, holiday retail sales were up 7.6%, down from last year’s 8.5% increase, according to Mastercard SpendingPulse. This search tracks all types of payments, including cash and debit cards. The consensus expected a 7.1% increase.

The odds of a 25 basis point hike by the Federal Reserve at the February meeting fell below 60% for the first time in weeks, to 59.4%. This would take the yield into the range of 4.5% to 4.75%. An increase of 50 basis points is expected at 40.6%, according to the CME FedWatch Tool.

The S&P Energy Select Sector ETF (XLE) was the best performing sector of all 11 S&P sectors, up 0.9%. The Technology Select Sector ETF (XLK) was the worst performer, down 0.7%.

China retail stocks jump as China reopens

China has announced plans to lift coronavirus travel restrictions and ease quarantine restrictions on arriving travelers early next month.

Some US-traded Chinese stocks jumped on the news. The Hong Kong Stock Exchange was closed on Tuesday due to a public holiday.

online retailers JD.com (JD) and pinduoduo (PDD) both gained more than 2% on Tuesday morning.

In the United States, airlines canceled thousands of flights due to low temperatures and snow in large areas of the country. More than 4,000 US flights were canceled on Monday and another 3,000 or more flights are expected to be canceled by noon ET on Tuesday, according to FlightAware, a flight tracking website. Of all airlines, Southwest had by far the most canceled flights over the two days.

Southwest Airlines (LUV) dumped 5% on cancellations. The US Department of Transportation said it was concerned about Southwest’s “unacceptable” rate of cancellations and delays. Southwest stocks are still trying to get support from their 50-day line.

JetBlue Airways (JBLU) fell more than 2%, but united airlines (UAL) gained 1%.

Stock market movers and shakers

Tesla sold nearly 8% in the stock market on Tuesday, as weekly vehicle registration data in China suggested the global electric vehicle giant’s year-end incentives were not enough to sustain Tesla’s deliveries. Furthermore, a Reuters report said the electric vehicle giant plans to extend reduced production at its Shanghai factory until January.

no (NIO) fell more than 8% after the electric vehicle maker said it cut its fourth-quarter delivery outlook amid Covid restrictions in China.

Litter (AAPL) was down 1.4% despite an analyst report claiming it recovered from shortages that reduced the availability of iPhone 14 Pro models during the holiday shopping season. Samik Chatterjee, an analyst at JPMorgan, said his company’s channel scans indicate an improved offering of premium models of the latest iPhones.

amazon (AMZN) lost 1.8%. Historically speaking, Amazon is one of seven widely held stocks to beat the S&P 500 at Santa Claus rallies in previous years.

Follow Michael Molinski on Twitter @IMmolinski

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