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Date: 2024-07-17 Page is: DBtxt001.php txt00023785 |
STOCK MARKET
CNBC REPORTING CNBC stock market commentary for Monday, December 19th, 2022 Original article: https://www.cnbc.com/2022/12/18/stock-futures-inch-lower-to-start-the-week.html Peter Burgess COMMENTARY Peter Burgess | ||
UPDATED MON, DEC 19 20225:47 PM EST
Stocks close lower for a fourth day as recession angst dashes hope of year-end rally
Carmen Reinicke
Samantha Subin
Pro Picks: Watch all of Monday's big stock calls on CNBC
VIDEO09:05
Pro Picks: Watch all of Monday’s big stock calls on CNBC
Stocks fell Monday as recession fears mounted and investors worried time is running out for a year-end rally.
The Dow Jones Industrial Average shed 162.92 points, or 0.49%, to close at 32,757.54. The S&P 500 fell 0.90% to 3,817.66, and the Nasdaq Composite shed 1.49% to 10,546.03, weighed down by shares of Amazon, which slipped 3.35%.
Monday’s close marked the fourth consecutive day of losses for all three averages.
The moves followed another down week for stocks after the Federal Reserve delivered a 50 basis point short-term interest rate hike and signaled higher-for-longer rates. Fears that the central bank will push the U.S. economy into a recession increased as policymakers upped their forecast for future hikes above previous expectations, saying they now expect to increase rates to 5.1%.
“As we near the end of December, investors are still waiting on that Santa Claus Rally, with stocks coming off back-to-back down weeks for the first time since September,” said Chris Larkin, managing director of trading at E*Trade from Morgan Stanley. “Data showing inflation cooling may have given the market a short-lived boost, but the Fed standing firm with Powell driving home the point that rates could remain elevated for quite a while likely grounded some investors.”
Other central banks are also in hawkish modes, adding to investor worries of global recession. The European Central Bank last week hiked rates and said it sees more significant increases ahead. The Bank of Japan is also potentially reconsidering its 2% inflation target and may start to boost rates soon.
Stocks are set to round out a dismal monthly performance in December after two consecutive negative weeks. So far, the Dow is set to end the month 5.3% lower, and the S&P 500 is down 6.4% in the same timeframe. The Nasdaq Composite is on track to decline 8% this month.
Investors will also be watching for a few earnings reports due later in the week. FedEx and Nike are both scheduled to report earnings results on Tuesday after market close. As recession fears mount, earnings results will become more of a focus.
“Rates and inflation may have peaked but we see that as a warning sign for profitability, a reality we believe is still underappreciated but can no longer be ignored,” wrote Michael Wilson, equity strategist at Morgan Stanley, in a Monday note.
Lea la cobertura del mercado de hoy en español aquí.
17 HOURS AGO
Stocks close lower for fourth day in a row
Recession fears and dashed hopes of a year-end rally weighed on stocks Monday, sending them to the fourth consecutive negative close.
The Dow Jones Industrial Average shed 163.85 points, or 0.50%, to close at 32,756.61. The S&P 500 fell 0.91% to 3,817.47, and the Nasdaq Composite shed 1.49%to 10,546.03 weighed down by shares of Amazon, which slipped 3%.
—Carmen Reinicke
17 HOURS AGO
Morgan Stanley names its top software picks for 2023
Despite a dismal outlook for software stocks heading into 2023, Morgan Stanley sees opportunities within names focused on growth at a reasonable price.
The bank outlined its favorite software names for 2023 in a note to the client Monday, saying that companies that trade at attractive multiples, continue to grow margins, and offer solid long-term growth opportunities stand to benefit in the months ahead.
While IT spending budgets may dwindle or compress as a downturn looms, the bank views long-term growth for the sector as companies focus on the cloud.
Morgan Stanley highlighted Microsoft as one of the stocks poised to benefit from a consolidation in software spending, with its price target suggesting 25% upside from Friday’s close.
CNBC Pro subscribers can check out the full list of stocks to make the cut here.
— Samantha Subin
17 HOURS AGO
Morgan Stanley calls this media stock a top 2023 pick because of growing F1 popularity
This unusual media and entertainment stock is a top pick for 2023 because of the rising popularity of Formula One, according to Morgan Stanley. The investment firm said the stock can remain resilient even in a cooling economy.
In fact, this stock is expected to rip nearly 30% higher, according to the firm.
CNBC Pro subscribers can read about the stock here.
— Sarah Min
18 HOURS AGO
Stocks near session lows heading into final hour of trading
Stocks slid even further Monday and were near session lows heading into the final hour of trading.
The Dow Jones Industrial Average shed 300 points, or 1%. The S&P 500 fell 1.26%, and the Nasdaq Composite shed 1.68%, weighed down by shares of Amazon, which slipped 3%.
Stocks are on track to end December in negative territory after two consecutive weeks in the red.
—Carmen Reinicke
18 HOURS AGO
Evercore ISI lowers estimates, price target for Amazon, maintains outperform rating
Evercore ISI’s Mark Mahaney lowered his estimates and price target for Amazon, saying the investment firm’s recent 2023 outlook report suggests further weakness ahead for online retail and cloud computing.
“We have cut our ’23 & ‘24 Revenue ests by 4% & 5%, and our ’23 & ‘24 Operating Income ests by 9% & 8% and are now below the Street. We have also lowered our PT to $150, based on 14X our ’24 EBITDA of $114B,” Mahaney wrote in a Sunday note.
Still, the analyst maintained an outperform rating on Amazon, saying the tech stock is the “highest quality asset we cover in terms of Revenue and Profit outlooks” for investors with two- to three-year time horizons.
“We continue to view AMZN as highly attractive for long-term investors as a DHQ (Dislocated High Quality) stock and see several Value Unlocks that we highlight in this report,” he added.
Shares of Amazon cratered more than 45% this year. Still, the analyst’s $150 price target, down from $170, represents upside of 70% from Friday’s closing price.
— Sarah Min
19 HOURS AGO
This healthcare stock is Carter Worth’s top pick going into 2023
Going into 2023, Carter Worth of Worth Charting has a top pick, UnitedHealth Group.
“If one were to try to be careful, prudent one thing is to always think large cap, another thing is to think defensive in terms of sector or theme, and then to pick a marquee name,” Worth said on CNBC’s “The Exchange” on Monday.
UnitedHealth has gained more than 4% year to date, outperforming the broader market.
“This is a stock that is clearly domestic - it doesn’t care about currency, it doesn’t care about oil, it doesn’t care about Putin,” he said. It is also the definition of a stock in an uptrend.
“Considering all things, this is as good of a pick as any going forward,” he said.
On the flip side, he called Beyond Meat
the stock of the year as it illustrated an important rule.
“Don’t buy stocks in downtrends,” he said. The stock has shed nearly 80% this year.
—Carmen Reinicke
19 HOURS AGO
SVB Private’s Saccocia likes this industrial stock as companies refocus manufacturing in the U.S.
SVB Private’s Chief Investment Officer Shannon Saccocia says Rockwell Automatio
n should benefit from companies improving their manufacturing capabilities in the U.S. in 2023.
“I like companies like a Rockwell Automation, for instance, that are able to improve the technology of these manufacturing companies, be able to make them more efficient, and hopefully mitigate some of the pressure that they have from hiring,” she told CNBC’s “Halftime Report” on Monday, noting that the sector’s faced an exodus as older workers retire.
Saccocia views the manufacturing sector as an area of the economy ripe with opportunity as production issues arise in China. These problems should persist and convince many companies to shift production back to the U.S. and focus on capital expenditure to improve their capabilities.
Bringing manufacturing back to the U.S. “is one of the reasons that we are a bit more bullish on the U.S. than maybe we are on Europe in this in this period,” she said.
— Samantha Subin
19 HOURS AGO
Stocks making the biggest midday moves
These stocks are making the biggest moves during Monday’s choppy session.
Disney — Disney fell 3.6% after its film, “Avatar: The Way of the Water” fell short of box office expectations. The highly-anticipated movie brought in $134 million, less than the $175 million expected by analysts and under the $135 million to $150 million range Disney had forecast.
Aerojet Rocketdyne, L3Harris Technologies — Shares of Aerojet Rocketdyne rose 1.6% after the defense contractor agreed to be bought by rival L3Harris Technologies for $4.7 billion, or $58 per share in cash. L3 Harris fell more than 3%.
Casino operators — Wynn Resorts fell 4.2%, while MGM Resorts lost 2.9% and Las Vegas Sands dropped 1.6%. The casino operators were just awarded new 10-year concessions, or operating agreements, to operate their Macao casino resorts. Wynn has committed to investing $2.2 billion in Macao, while Las Vegas Sands is looking at a $3.75 billion investment and MGM plans to invest $2.1 billion.
Read more here.
—Carmen Reinicke, Michelle Fox
20 HOURS AGO
Watch key S&P 500 gap at 3,818, BTIG’s Krinsky says
There’s a key level on the S&P 500 that investors should be watching, Jonathan Krinsky of BTIG said in a Monday note.
“As far as SPX levels, we are still watching for the gap at 3,818 (~3,845 for ESH3) to get filled,” he said. “It looks like it wants to get filled sooner than later. If that does get filled, then we think some consolidation is likely in the 3,800-3,900 range.”
He also said that low-volatility continues to outperform, which is generally “not a risk-on sign.” He noted that semiconductors are down more than 2% today.
“SMH still has $10 of downside to fill its November 9th gap,” he said.
He added that dismal days are likely to continue through 2023, even though analysts generally think the year will be better for both stocks and bonds.
“While we just wrote about how the bond/stock correlation appeared to be flipping, today is back to what we saw for much of 2022, stocks and bonds down,” he said. “There will be days like this, but we expect as we head into 2023 the correlation will continue to move towards stocks down, bonds up.”
—Carmen Reinicke
20 HOURS AGO
There may be some relief in markets towards year-end, Citi says
After two weeks of back-to-back losses, there may be a brighter two weeks ahead for stocks as the year comes to an end, according to Citi.
“Just as the Grinch has a late epiphany, the final-two-week equity seasonals are brighter, and less influenced by the poor YTD returns,” wrote analyst Alex Saunders in a Monday note. “To be sure, our Global Asset Allocation team remain bearish going into a recession year but there is the possibility of some welcome short-term relief from a challenging year over the next few weeks.”
In October, Citi noted that negative years have less potential for rallies in the final weeks. This year especially, interest rate hikes have weighed on equities.
“We did not see a lasting November/December rally this year so far, as Santa Claus effects are much more muted in down years,” Saunders wrote. “However, December seasonals in these final two weeks are more positive at +2% on average.”
That may carry forward to the start of next year. Still Citi sees a recession likely in 2023 and is underweight equities.
—Carmen Reinicke
20 HOURS AGO
S&P 500 headed for worst December in four years
The S&P 500 has dropped more than 6% this month, as Wall Street struggles heading into year-end. That puts in on track for its worst monthly performance since September. It would also be its biggest December decline since 2018, when it slid 9.18%.
— Fred Imbert
21 HOURS AGO
Here’s why Telsey Advisory says Amazon is a top pick for 2023
Expect the unexpected is Telsey Advisory Group’s advice for 2023. The firm expects current conditions to prevail as the year begins. Discretionary spending will be strained and companies will move inventory with the help of discounting. But Dana Telsey, the firm’s CEO and chief research officer, said the second half of the year could be a good one for the industry. Profits are likely to recover from easier comparisons, inventory will be lean and inflation will be moderating, she said.
Stripping out autos, gas, food and drinking places, Telsey expects the core U.S. retail sales to grow 4.2% to $5 trillion next year, which admittedly is a bit slower than the projected 2022 growth of 7.0% from 2021.
Retail stocks are largely trading at valuations that are discounted relative to historical levels, suggesting investors have already priced in an economic downturn, she said. Some of Telsey’s top picks are Amazon
, Ralph Lauren
and Nike
.
Telsey’s $140 price target for Amazon suggests nearly 60% upside from Friday’s closing price, making it one of the firm’s top picks.
“Amazon is gaining market share by leveraging its sticky Prime customer base, exanding into new categories, such as grocery, pharmacy, and fashion, and growing AWS to enhance profitability,” she wrote in a research note Monday. In addition, Amazon also stands to benefit from cost-saving efforts, which should help boost profits next year and beyond.
As for those current conditions, foot traffic at the malls continues to be weak, prompting some retail analysts to speculate that the pace of store closures will pick up in the coming year.
—Christina Cheddar Berk
21 HOURS AGO
Amazon falls to lowest level since March 2020
Shares of Amazon sold off Monday, slipping as much as 3% to the lowest levels seen since March 2020.
The losses brought Amazon’s year to date slump to more than 48%. The company has been caught up this year in the technology rout that’s weighed on companies sensitive to higher interest rates.
Amazon slides
WATCHLIST
+
Chart
Line chart with 392 data points.
The chart has 1 X axis displaying Time. Range: 2022-12-12 15:59:57 to 2022-12-19 15:59:57.
The chart has 1 Y axis displaying values. Range: 84 to 96.
End of interactive chart.
chart logo
—Carmen Reinicke
21 HOURS AGO
Walt Disney shares fall
Shares of the Walt Disney Company
dropped more than 3% after ticket sales of “Avatar: The Way of Water” fell short of box office forecasts.
In its opening weekend, the Avatar sequel netted $134 million at the domestic box office, which was lower than the $175 million forecasted by industry analysts, and below the $135 million to $150 million range estimated by Disney.
Last week, Needham’s Laura Martin cut her estimates for the first quarter of 2023, saying she expects Disney will face pressure from the large marketing budget to launch the Avatar the sequel. Disney ended its most recent fiscal year in October 1, 2022.
“Much of the profit pressure in the Dec quarter came from the large marketing budget to launch Avatar, The Way of Water whereas revenue only began on the Dec 16th release date,” she wrote.
Disney shares fall
WATCHLIST
+
Chart
Line chart with 500 data points.
The chart has 1 X axis displaying Time. Range: 2022-12-19 08:36:00 to 2022-12-20 08:36:00.
The chart has 1 Y axis displaying values. Range: 85 to 91.
End of interactive chart.
chart logo
— Sarah Min, Sarah Whitten
22 HOURS AGO
These stocks are hitting new 52-week highs and lows
Stocks are trading mixed on Monday, sending some individual names to 52-week highs and lows.
These are the stocks hitting 52-week lows today:
| The text being discussed is available at | https://www.cnbc.com/2022/12/18/stock-futures-inch-lower-to-start-the-week.html and |
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