Stocks, Wall Street, and Consumer Confidence Rise in the First Week of the Decline of the U.S. Stock Markets
Stocks surged Wednesday as investors cheered healthy results from two of America’s leading companies and a surprisingly strong reading on consumer sentiment.
The Dow finished with a gain of more than 525 points, or 1.6%, after FedEx
(FDX) and Dow component Nike
(NKE) each reported earnings that topped analysts’ forecasts. FedEx and Nike are both up on the day. The S&P 500 and techMARKs each rose 1.5%.
Walgreens
(WBA) was one of just two Dow losers, falling more than 2%. There is concern that there will be shortages of popular pain relief medication for kids. Walgreen rival CVS
(CVS) was down about 1.5%. The weakness in guidance from rival Rite Aid made the stock plunge more than 17%.
December is a month full of market predictions for the year to come. Everyone, from economists to analysts to grocers, seems to have a strong feeling about how stocks will behave going forward.
Wall Street was also cheering a better-than-expected report on consumer confidence from the Conference Board Wednesday. Consumer confidence for December was up from the previous month and easily beat expectations. Consumers are not as concerned about inflation.
The jump in sentiment on Main Street came even as more signs point to a continued slowdown in the housing market. The decline in Existing home sales in November was much bigger than expected. It is the tenth straight month of declining sales.
The share price ofTesla has plunged due to investor fears that Musk is distracted by the constant drama at its social networking service. Potential buyers of electric cars could be alienating from Musk, because of his often controversial statements.
The Fate of Cryptocurrencies in Carnival, the FTX Exchange and Bitcoin Miner Core Scientific: How CCL Annihilated
Shares of cruise king Carnival
(CCL) rose about 5% after the company reported a narrower loss than what analysts were expecting.
The former leader in mobile devices, which became a cybersecurity company, lost 10% of its value on a weak outlook.
There is more turmoil in the world of cryptocurrencies. Uncertainty over the future of FTX exchange founder Sam Bankman- Fried, who is being held in the Bahamas, caused the price of virtual currency to be slightly lower.
More victims are claimed by the carnage in crypto. Bitcoin miner Core Scientific filed for Chapter 11 bankruptcy protection Wednesday. The company’s shares fell to about 5 cents a share.
What Happens in the S&P 500: Expectations for Growth and Risk in the Next 15 Years and Where Do We Go From Here?
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This year, forecasters are set to miss the mark by their widest margin in about 15 years, according to FactSet data. The S&P 500 is on track to over estimate its performance by 40%.
No major analysts predicted last December that this year would (likely) be the worst for US stocks since 2008, that oil prices would shoot from $70 to $130 and then careen back to $70, and that the Federal Reserve would announce four straight historic three-quarter point interest rate hikes.
Geopolitical chaos, global pandemics and extreme weather events have created unexpected and outsized head and tailwinds – creating extremely turbulent rides for markets.
Christopher Smart, chief global strategist at Barings, wrote a recent note that encouraged investors to look into the future and strike a sense of humility. “They may take some consolation that outside US intelligence circles, almost no one expected a Russian invasion last December. But that will be small solace in tough markets and evanescent returns.
Analysts seem to think that inflation risks will decline in the near term, but they are still asking investors to wear seatbelts while traveling, in case of unforeseen bumps along the way.
The average difference between the target price estimates by industry executives at the beginning of the year and the final price for the index has been 8.3% over the last 20 years.
Analysts underestimated the final value by 13 of the 20 years and overestimated it by 7 of the 20 years.
Market analysts are great at explaining what drives stocks in the short-term, but predictions clearly haven’t been their cup of tea – nor should they really matter to investors. The S&P 500 has good years and bad years, but long-term investors know that it typically works out in the end: The return averages out to about 10% per year for nearly the last century.
What’s happening: Markets often surge at the end of the year – one last gift for investors during a time when market volume and volatility is relatively quiet.
According to analysts, it’s unlikely that Santa will reward investors with a big rally in the last days of the year, since he will be on Christmas and New Year’s Day.
institutional investors take time off, so trading activity is usually low. retail investors who swing bullish will have more opportunities to sway markets. A bonus and holiday gifts can be put to use in the stock market.
It’s important to look at fundamentals and valuations before getting all wound up with holiday cheer, said Scott Wren, senior global market strategist at Wells Fargo. “That might sound like Ebineezer Scrooge, but sometimes all of that cheer needs a shot of reality along with the eggnog and this may be one of those times,” he said.
Rate hikes will continue, he said, and the economy will likely stumble in the coming months along with markets. Santa Claus is coming to town but it is unlikely he will reward investors with a big equity rally.
Source: https://www.cnn.com/2022/12/28/investing/premarket-stocks-trading/index.html
New restrictions on Chinese companies that trade on the e+e- and Nasdaq: The first three months of the New Year are coming to an end
International travelers will no longer be required to be under a bicyle beginning on January 8. Those changes come after nearly three years of isolating and painful restrictions.
Chinese companies that trade on the Nasdaq were some of Tuesday’s top performers. JD.com and Baidu gained more than 4%. The Golden Dragon China Index went up 2%.
The NHC said that travelers will only have to show a negative Covid test result in the 48 hours before departure. They are given five days of hotel isolation and three days of self-isolation at home.
China has been sealed off from the rest of the world since March 2020, in order to prevent the spread of the virus, even though the rest of the world has begun to return to normal.
Foreigners are not allowed into China except for a limited amount of business or family visits. The NHC said it will further “optimize” arrangements for foreigners to visit China for work, business, study or family reasons and “provide convenience” for their visa applications.