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start trying to recover in the stock market; Tesla jumps amid electric vehicle credit guidelines

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Dow futures tilted lower after hours, along with futures for the S&P 500 and Nasdaq, heading into the final trading day of 2022. Major indexes rose strongly Thursday on the back of jobs data, an Apple (AAPL) iPhone news and Tesla (TSLA) continue to bounce.




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However, the market is in a correction after breaking the key levels on Wednesday. Thursday marked just the first day of a new stock market rally attempt. Investors should be very careful about taking new positions.

midpiece (MEDP) flashed a buy signal on Thursday, while KLA Corp. (KLAC), Starbucks (SBUX), United Rentals (URI), Mobileye (MBLY), Super microcomputer (SMCI) And the Fluor (FLR). But these stocks are likely to go up or down with the market.

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MEDP, Fluor, and United Rentals stocks in the running IBD Leaderboard. KLAC stock is running Long-term leaders of IBD. MBLY stock is on file IBD 50. KLA Corp. and URI are in IBD Big Cap 20.

Meanwhile, new Treasury guidance said many Model Y vehicles would not be eligible for US tax credits starting Jan. 1 without sharp price cuts. But there is a loophole that could allow all Tesla cars — and any electric vehicles — to qualify for massive tax credits at any price.

Dow jones futures today

Dow futures fell 0.1% against fair value. S&P 500 futures fell 0.2%. Nasdaq 100 futures were down 0.15%.

Remember to work in overnight Dow Jones futures contracts and elsewhere that does not necessarily translate into actual trading in the next regular session Stock market share.


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Market rally attempt

The stock market has had a strong rebound, rallying during the morning and then holding those gains into the afternoon.

The Dow Jones Industrial Average rose just over 1% on Thursday Stock market trading. The S&P 500 jumped 1.75%. The Nasdaq Composite and Russell 2000 Composite jumped 2.6%.

Initial claims rose slightly more-than-expected in the week ending Dec. 24, but remained low at 225,000. Continuing claims rose 41,000 to 1.71 million in the latest week, the highest level since early February.

AAPL stock jumped 2.8% to 129.61 after sliding 3.1% Wednesday to a bear market low. Apple iPhone production is rebounding, according to the Wall Street Journal, after another report on recent iPhone production problems.

US crude oil prices fell 0.7% to $78.40 a barrel.

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The 10-year Treasury yield fell 5 basis points, to 3.83%.

Exchange Traded Funds

between the The best mutual fundsInnovator IBD 50 ETF (fifty(up 1.1%, while the Innovator IBD Breakout Opportunities ETF is up)fit) by 0.9%. IShares Expanded Technology and Software Fund (ETF)IGV) rebound 3%. ETF VanEck Vectors Semiconductor (SMH) increased by 3.3%. Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(jumped 5.2% and the ARK Genomics ETF)ARKG) 4.1%. Tesla stock is a major holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETFs (XME) an advance of 1.9%. US Global Gates Foundation ETF (Planes) rose 2.65%. SPDR S&P Homebuilders ETF (XHB) increased by 2.4%. Energy Defined Fund SPDR ETF (xle(up just over 1% and Financial Select SPDR ETF)XLF) increased by 1.4%. SPDR Health Care Sector Selection Fund (XLV) by 1.1%.


Top five Chinese stocks to watch now


Tesla stock

Tesla stock jumped 8.1% to 121.82 after bouncing 3.3% on Wednesday. TSLA stock is still down slightly for the week and up 37% in December. After this sell-off, Tesla stock was set to rebound, but it remained well below key levels.

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Tesla Model Y tax credits

Tesla’s bull case for 2023 relies heavily on new US tax credits of up to $7,500 under inflation-lowering law that fuel high-margin domestic sales, offsetting weaker demand and prices in China and possibly Europe.

On Thursday, the Treasury Department listed vehicles that qualify for US motor vehicle credits. Most Model Y versions will have a maximum of $55,000 to receive EV credits, versus $80,000 for SUVs, vans and vans.

But seven-seat Model Y cars, which weren’t big sellers, would qualify up to $80,000.

The current base Model Y in the US starts at $65,990, and Tesla will need to lower the price, possibly by reintroducing the lower-range Model Y SR+, to get tax credits—unless it’s a seven-seat variant.

But, there is another twist! The Treasury also said that electric vehicles leased by consumers could qualify for commercial electric vehicle tax credits. This makes electric vehicles assembled outside North America eligible, including the Hyundai Ioniq 5 and Kia EV6. Foreign automakers and US allies in Europe and Asia adamantly opposed assembly requirements in North America. But the rental rules also seem to allow any electric vehicle to qualify at any price, with no income restrictions, either.

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It will be interesting to see what Tesla and other automakers do in terms of variants and pricing to maximize the benefits of the new tax breaks.

But investors seem happy with the overall picture.

TSLA stock rose.


Tesla vs. BYD: Which EV giant is the best to buy?


Stocks near buy points

Medpace rose 3.4% to 215.62, breaking the downtrend line as it bounced from the 21-day line and the 50-day line. MEDP stock has held up well, consolidating a deep 16% right next to the top of a long, deep base. the official Point purchase It is 235, but Thursdays offer early entry.

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KLAC rose 3.3% to 379.86, bouncing back from the 10-week line. A move above the 21-day line could provide an opportunity to buy KLAC stock as a long-term leader.

SBUX stock rose 1.2% to 99.77, rebounding from a 10-week break from its 21-day high. This may be an early entry into a shortstop rather than quite a base. This, in turn, can be seen as an indication of a deep 17-month consolidation for Starbucks stock.

URI stock advanced 1.2% to 356.21, rebounding from the 21-day line. United Rentals has approached the 368.04 buy handle point on a 13-month consolidation period, and briefly surpassed it earlier this month. URI stock traded very tightly in its handle. the line of relative strength reached a new high, reflecting United Rentals’ outperformance against the S&P 500.

MBLY stock rose 2.8% to 34.51, rebounding from the intraday decline from the 21-day moving average. Mobileye’s IPO went public in late October at 21 shares. MBLY stock showed strength in a weak market, but like many new IPOs it saw big moves. Stocks are starting to cool off. An aggressive investor could look for a break of the trend line to get in, but ideally, Mobileye shares would form a new base.

FLR rose 0.8% to 34.95, continuing to trade tightly, working out the prospect Flat basewhich will be a file Base pattern on base. Fluor’s earnings are expected to rise 80% in 2023, as infrastructure stocks show strength in public and private projects.

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SMCI rose 1.6% to 81.91, bouncing from the 50-day line but finding resistance at 21-days. A strong move above 21 days, past Wednesday’s high of 84.35, could provide an early entry. One of the strongest-growing stocks of 2022, Super Micro Computer stock has been consolidating for several weeks after breaching the earnings gap on November 2nd, with a continued advance to 95.22 on November 25th. SMCI stock could have a new base at the end of next week.

Market analysis

The stock market experienced a strong rebound after Wednesday’s sell-off. After retreating since the intraday high on Dec. 13, the major indices were definitely “due” for a bounce.

The question is whether they will follow through in the coming days and weeks.

The market moved towards a correction on Wednesday as the Dow lowered its 50-day moving average and put the Nasdaq at a closing low in two years.

So Thursday was only the first day of a fresh bullish attempt in the market. It will take a lot more than that to feel more confident.

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The Dow Jones is back above the 50-day line, but it is still below the 21-day line.

The S&P 500 is still below 50 days, with more resistance at the 200-day line and the December highs.

While Tesla, Apple and several battered chip and software names led Thursday’s rebound, some leading stocks gave buy signals or moved into a position, such as MEDP stock.


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What are you doing now

It’s tempting to get back into the market when the indices are rising sharply and there’s a sea of ​​green among the leading and notable stocks.

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But since the bear market low of Oct. 13, the buy and breakout signals have largely faded.

Certain sectors, including industrial, metals, and medical, have held up better in recent weeks, so it’s easier to justify nibbling in these areas, either with specific stocks or sector-specific ETFs. But make any exposure small and be quick to take profits and cut losses.

Conclusion: This is a market correction. Don’t act according to the bull market rules, especially the 2020 crazy bull rules.

Invest as if you were driving on an icy and windy road and not on an open highway. Proceed carefully, or wait on the side of the road.

It’s more time to plan your trip versus adventure. Work on watchlists. A number of stocks from a variety of sectors are showing strength.

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Read The Big Picture Every day to keep up with the market trend, stocks and leading sectors.

Please follow Ed Carson on Twitter at @tweet For stock market updates and more.

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Stock, bond and cryptocurrency investors remain on edge after a rough year for the markets

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This version is for personal, non-commercial use only. Distribution and use of this material is subject to our Subscriber Agreement and copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.

https://www.wsj.com/articles/stock-bond-and-crypto-investors-remain-on-edge-after-brutal-year-for-markets-11672403124

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Dow Jones losses are heading towards the closing bell as US stocks approach their worst year since 2008

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US stocks were trimming losses heading towards the closing bell on Friday, but were still on track to post their worst annual loss since 2008, as the harvest of tax losses combined with concern over the outlook for US corporate and consumer earnings took its toll.

How are stock indices traded?
  • Dow Jones Industrial Average
    DJIA,
    -0.22%

    It fell about 182 points, or 0.6%, to 33,039 points.

  • S&P 500 index
    SPX,
    -0.25%

    It fell nearly 26 points, or 0.7%, to about 3,824.

  • The Nasdaq Composite Index fell 72 points, or 0.7%, to about 10,406 points.

Stocks posted their biggest gains of the month on Thursday, with the Dow Jones rising 345 points, or 1.05%, to 33,221 as major stock indexes rebounded after losses incurred earlier in the week that pushed the Nasdaq Composite to a new closing low for the year. . The S&P 500 was on track on Friday to wrap up its fourth consecutive losing week, the longest streak of weekly losses since May, according to FactSet data.

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What drives the markets

US stocks traded lower on Friday afternoon, on pace to close the last trading session of 2022 with weekly and monthly losses.

Stocks and bonds have been crushed this year as the Federal Reserve raised its benchmark interest rate more aggressively than many expected, as it sought to crush the worst inflation in four decades. The S&P 500 is on track to end the year with a loss of nearly 20%, its worst annual performance since 2008.

“Investors were on edge,” Mark Heppenstahl, chief investment officer at Penn Mutual Asset Management, said in a phone interview Friday. “It seems as if being able to bring prices down might be a little easier given how bad the year has been.”

Stock indices have fallen in recent weeks as the recent rally inspired by hopes in the Fed’s policy focus faded in December after the central bank indicated it would likely wait until 2024 to cut interest rates.

On the last day of the trading year, the markets were also hit by selling to capture losses that could be written off from tax bills, a practice known as tax harvesting, according to Kim Forrest, chief investment officer at Bouquet Capital Partners. .

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Forrest added that an uncertain outlook for 2023 has also weighed in, as investors worry about the strength of corporate earnings, the US economy and consumer as the fourth-quarter earnings season approaches early next year.

“I think the Fed, and then earnings in mid-January — they’ll set the tone for the next six months. Until then, it’s anyone’s guess.”

The US central bank has raised its benchmark interest rate by more than four percentage points since the start of the year, pushing borrowing costs to their highest levels since 2007.

The timing of the first Fed rate cut will likely have a significant impact on markets, according to Forrest, but the outlook remains uncertain, even as the Fed tries to signal that it plans to keep interest rates higher for longer.

On the economic data front, the Chicago PMI for December, the latest major data release for the year, Came stronger than expected. Climbing to 44.9 from 37.2 in the previous month. Readings below 50 indicate contraction.

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In the coming year, Heppenstahl said, “we are likely to shift toward concerns about economic growth rather than inflation.” “I think the decline in growth will eventually lead to an even greater drop in inflation.”

Read: Stock market investors face 3 recession scenarios in 2023

Eric Sterner, chief information officer at Apollon Wealth Management, said in a phone interview on Friday that he expects the US to fall into a recession next year and that the stock market could see a new bottom as companies likely review their earnings. “I think the earnings outlook for 2023 is still very high,” he said.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all on pace Friday afternoon posting weekly losses of around 1%, according to FactSet data, at last check. For the month, the Dow was down about 5%, the S&P 500 was down about 7% and the Nasdaq was about to crash down about 10%.

Read: Value stocks are outperforming growth stocks in 2022 by a large margin historically

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As for bonds, Treasury yields rose on Friday as the US sovereign debt market was set to post its worst year since at least the 1970s.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.879%

It rose about four basis points on Friday at 3.88%, according to FactSet data, in the latest check. Ten-year yields jumped about 2.34 percentage points this year through Thursday, on track for the biggest annual gain ever based on data going back to 1977, according to market data from Dow Jones.

Meanwhile, the yield on the two-year note
TMUBMUSD02Y,
4.423%

Up about 3.64 percentage points in 2022 through Thursday to 4.368%, 30-year return
TMUBMUSD30Y,
3.971%

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It jumped 2.03 percentage points over the same period to 3.922%. That marks the largest increase in a calendar year for each based on data going back to 1973, according to market data from Dow Jones.

Outside the US, European stocks capped their biggest percentage drop in a calendar year since 2018, with the Stoxx Europe 600
xxxp,
-1.27%
And the
It is an index of euro-denominated stocks, down 12.9%, according to market data from Dow Jones.

Read: A downturn in the US stock market is trailing these international ETFs as 2022 draws to a close

Companies in focus

Steve Goldstein contributed to this article.

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Fed’s reverse repo facility reaches $2.554 trillion by Reuters

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© Reuters. FILE PHOTO: The Federal Reserve Building in Washington, US, January 26, 2022. (Reuters)/Joshua Roberts/File Photo

Written by Michael S Derby

NEW YORK (Reuters) – A key facility used by the Federal Reserve to help control short-term interest rates saw record inflows on Friday, the last trading day of the year.

The New York Fed said its reverse repo facility took in $2.554 trillion in cash from money market funds and other eligible financial firms, beating the previous high seen on Sept. 30, when inflows totaled $2.426 trillion.

The cash rally was almost certainly tipping into record territory in the usual end-of-quarter pattern that could worsen further towards the end of the year. On those dates, for a variety of reasons, many financial firms prefer to deposit money in the central bank rather than in the private markets.

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The Fed’s reverse repo facility has been very active for some time. After seeing almost no absorption for a long time, money began to gravitate toward the central bank in the spring of 2021 and then grew steadily. Daily reverse repo usage has been steadily above the $2 trillion mark since June.

The reverse repo facility takes cash from qualified financial firms in what is an actual loan from the Federal Reserve. The current rate is 4.3%, a yield that is often better than rates for short-term private sector lending.

The reverse repo facility is designed to provide a soft floor for short-term rates and the federal funds target rate, and is the Fed’s primary tool for achieving its function and inflationary mandates. To mark the higher end of the range, the Fed is also pushing deposit-taking banks to deposit cash at the central bank, where the interest rate on reserve balances is now 4.4%.

The federal funds rate is currently set between 4.25% and 4.5% and is trading at 4.33% as of Friday, sandwiched between the reverse repo rate and interest on reserve balances.

There are no signs of shrinkage

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Even with the heavy use of reverse repo, Fed officials have always remained unconcerned about large outflows, even as some in financial markets worried about the potential for the Fed to drain the borrowing and lending lives of private money markets.

Fed officials also expected that as the central bank continues to raise interest rates with the goal of bringing down very high levels of inflation, the use of the reverse repo facility should decrease. But that hasn’t happened yet, and some in the markets now believe that the consistently high utilization of the Fed facility will be around for some time to come.

Research by the Federal Reserve Bank of New York indicated that banking regulation issues make demand for the Fed’s reverse repo instrument high. Meanwhile, the Kansas City Fed added its view that large inflows are related to limited private market investment opportunities and policy uncertainty.

Strong cash flows to the central bank may not have alarmed central banks, but they have driven their operations to an actual loss. The Federal Reserve finances itself through interest on the bonds it owns as well as the services it provides to the financial community. It usually makes a noticeable profit and by law returns it to the treasury.

Currently, the cost of paying interest on reverse repo agreements and reserve balances outweighs income. The Fed reported Thursday that as of Dec. 28, the accounting metric it uses to track losses was $18 billion. Many observers expect that the Fed’s plans to raise interest rates further and keep them at high levels will mean fairly large losses for the central bank over time, even if these losses will not affect the action of the Fed’s monetary policy.

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