Tech Stocks Lead Decliners, Tesla and Apple Drop to One-Year Lows

Barry Adams
27 Dec, 2022
New York City

Stocks lacked direction in early trading in thin trading in the last week of 2022 as investors reviewed portfolios for tax purposes. 

Investors are reviewed latest data on wholesale and retail inventories and international trade deficit. 

In holiday-shortened trading, bond yields rose and investors weighed 2023 economic outlook and China reopening. 

Chinese health regulators said international passengers arriving in China will no longer require mandatory quarantine from January 8. 

The National Health Commission also said Chinese citizens will be allowed to resume international travel without specifying the date. 

Health regulators are also bracing for a surge in travel in two weeks ahead of Chinese Lunar New Year and at least 255 million people are expected to travel to the countryside. 

 

Indexes In Review 

Stocks lacked direction and energy prices rose on the expectations of higher demand from China as social mobility resumes. 

The S&P 500 index eased 2.51 points to 3,841.12 and the Nasdaq Composite index fell 0.8% to 10,409.98.

Crude oil price increased $1.58 to $81.15 a barrel and natural gas prices rose 5 cents to $5.12 a thermal unit. 

Copper futures price rose to a six-month high of $3.09 per pound the expectations of rising demand from China. 

The yield on 2-year Treasury notes increased to 4.41%, 10-year Treasury notes rose to 3.84% and 30-year  Treasury bonds advanced to 3.92%. 

 

Smallest International Goods Trade Deficit In Nearly Two Years 

International goods trade deficit declined 15.6% or $15.5 billion from a month ago to $83.3 billion, the U.S. Census Bureau reported Tuesday in its preliminary estimates.

The November deficit was the smallest since December 2020.

Goods trade deficit in October was $98.8  billion. 

November exports were $168.9 billion, a decline of $5.3 billion from October. 

November imports were $252.2 billion, a decline of $20.8 billion from October. 

 

Wholesale Inventories Growth Accelerated In November 

Wholesale inventories in November increased 1.0% from October to $933.6 billion after adjusting for seasonal factors and trading days in the period, the U.S. Census Bureau reported Tuesday. 

November inventories jumped 21.0% from a year ago. 

October inventories increase from September were revised higher to 0.6% from the previous estimate of 0.5%. 

Retail inventories at the end of November increased 0.1% to f $738.7 billion and rose 18.4% from a year ago, after adjusting for seasonal factors and trading day difference. 

Retail inventories in October were downwardly revised to a decline of 0.4% from the previous estimate of a decline of 0.2%. 

 

U.S. Stocks In Review 

Tesla Inc declined 8.7% to $112.62 on the worries of falling sales in China despite the year-end discounts. 

Tesla China sales were between 10,000 and 13,000 in the first three weeks of December and fell just below 9,000 in the week ending December 25, according to CnEVPost. 

China's total new energy vehicle sales in the week ending on December 25 were about 182,000 units, an increase of 48.1% from a year ago and 12.6% from the previous week. 

Tesla dropped to a new 52-week low. 

Apple Inc dropped  1.3% to $130.07 and fell to its 52-week low after tech  stocks continued to slide in Tuesday's trading. 

Despite the weakness in tech stocks, some consumer staples and healthcare stocks traded at multi-year highs. 

JM Smucker jumped 0.9% to $159.85 and traded at all-time high and Merck & Co advanced 0.3% to a multi-year high of $112.20. 

Nio Inc ADR dropped 9.0% to $9.98 after the electric vehicle maker in China lowered its fourth quarter sales outlook to 39,000 from the previous estimated range between 43,000 and 48,000. 

The company blamed a sales shortfall to supply chain disruptions due to Covid outbreaks in major cities in China. 

China-linked stocks were also in favor after China relaxed travel restrictions. 

Las Vegas Sands Corp increased 4.4% to $48.51 and Wynn Resorts jumped 4.6% to $84.44. 

Alibaba Group Holding Ltd increased 3.7% to $88.95. 

Southwest Airlines Co declined 4.7% to $34.37 after the company canceled 70% of its scheduled flights and warned of flight disruptions for the next several days.