U.S. Stocks Lack Direction, Busy Week of Economic and Earnings Releases

Barry Adams
19 Dec, 2022
New York City

Stocks on Wall Street opened nearly unchanged after a week of selloff and markets are awaiting more data on inflation later in the week. 

U.S. stocks attempt to rebound after two weeks of decline amid growing worries of slowing economic activities and earnings downgrade in the upcoming year. 

Markets are also shifting away from the economic soft landing scenario after the Federal Reserve's commitment in fighting high inflation and admission that it will take a while before price stability returns. 

Investors are reassessing earnings and economic outlook after Fed Chairman Jay Powell forcefully reiterated the central bank's commitment to lower rates and forecasted higher rates for a prolonged period of time. 

Markets are awaiting the data on PCE Price Index, personal income and spending, durable goods report and consumer confidence. 

After thirty minutes of volatile trading, The S&P 500 index declined 0.3% to 3,840.47 and the Nasdaq Composite index dropped 0.7% to  10,633.23. 

 

Energy Markets Advance 

Natural gas prices extended losses in the third week and dropped near a 5-month low of $5.55 a thermal unit on the expectations of milder weather and lower demand of heating energy. 

Moreover, markets are awaiting the restarting of Freeport LNG terminal near Houston, Texas towards the year-end after six months of outage and resume exports to Europe. 

Crude oil futures increased $1.25 to $75.55 a barrel and natural gas futures fell 54 cents to $6.05 a thermal unit. 

 

Bond Yields Inched Higher 

Treasury yields inched higher as investors worried that the inflationary forces are stronger than anticipated despite the ongoing fall in energy prices. 

Markets also focused on the broadening of inflation from goods to services sector and noted the Fed's commitment in continuing its campaign of raising rates in early 2023. 

The yield on 2-year Treasury notes edged up to 4.22%, 10-year Treasury notes inched higher 3.56% and 30-year bonds increased to 3.62%. 

 

U.S. Stock Movers 

Aerojet Rocketdyne Holdings Inc increased 1.6% to $55.77 after the company agreed to be acquired by rival L3 Harris Technologies for $58 a share. 

L3Harris decreased 3.5% to $205.76. 

Sinclair Broadcast Group Inc declined 2.8% to $15.43 on a report from the New Yoro Post that the company's, Diamond Sports Group, regional sports network of 21 channels is likely to initiate bankruptcy proceedings. 

Tesla Inc dropped as much as 4% in pre-market trading to $146.45 on the worries that chief executive Elon Musk may be distracted from running the electric vehicle maker and distracted by his recent purchase of Twitter Inc. 

Mesa Air Group Inc increased 12.8% to $1.32 after the company said it is close to finalizing its deal with United Airlines.

American Airlines is said to terminate its relationship with Mesa for its regional flights on the worries that Mesa may not have operational and financial resources to run the regional network.  

Mesa said in a statement that the airline is looking to sell more planes and parts to raise capital but the regional carrier is struggling with nationwide pilot shortage after the sharp rebound in travel demand after two years of pandemic. 

Investors are awaiting earnings results from 107 companies including the list of following companies. 

BHP Group, Carnival Corporation, Cintas, FactSet Research, FedEx, General Mills, Micron Technology, Nike, Steelcase and Titan Pharma.