futures: inflation report due; Elon Musk Pledge raises Tesla Inc

Dow Jones futures rose slightly Friday morning, along with S&P 500 futures and Nasdaq futures. The Fed’s preferred inflation gauge is available ahead of the opening, while Tesla stock rose based on Elon Musk’s comments.


The stock market suffered heavy losses on Thursday, reversing Wednesday’s gains and more amid negative corporate news and economic data as well as negative comments from billionaire investor David Tepper. Major indices broke key levels with several blue-chip stocks retreating. Stocks pared losses, but closing declines were still significant.

nvidia (NVDA), L Research (LRCX) and other chip stocks were big losers, as was the memory chip maker micron technology (MU) missed views, reduced staff guidance, and announced additional cuts in capital spending.

the Tesla (TSLA) The meltdown continues. In addition to company-specific factors, Tesla shares fell Thursday along with other automakers carmax (KMX) cited vehicle affordability issues for its significant quarterly misses. TSLA stock rallied slightly after Elon Musk indicated that there would be no new stock sales until 2023.

Other massive signs showed weakness, with Apple sliding towards bear market lows again Amazon.com (AMZN) There already. Microsoft (MSFT) Major support has been breached.

Investors should be largely in cash, reducing already modest exposure and largely avoiding new purchases.

Third-quarter GDP growth was revised higher than expected, along with a measure of inflation in the report. Initial jobless claims rose but less than expected. November’s index of leading economic indicators fell strongly, reinforcing arguments for a recession next year.

PCE inflation data

On Friday, the Commerce Department will release the personal consumption expenditures price index for November. Inflation data is part of the monthly income and spending report.

The PCE price index should rise by 0.2% compared to October, with core prices also rising by 0.2%. PCE inflation should ease to 5.5% from 6% in October. Core PCE inflation is expected to slow to 4.6% from 5%.

The PCE inflation rate has been the Fed’s preferred rate measure for some time. Fed Chairman Jerome Powell recently said he’s keeping a close eye on PCE services prices excluding housing.

Personal income should rise 0.3% in November, with consumer spending rising 0.2%. Americans have been wallowing in savings and increasing credit charges in recent months.

Dow jones futures today

Dow futures rose 0.2% against fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures advanced 0.3%, with TSLA stock providing a slight boost.

The 10-year Treasury yield rose 4 basis points, to 3.71%.

Crude oil futures rose 2%.

PCE inflation figures will be released at 8:30 AM ET. Durable goods data for November will also be released at that time, with New Home Sales for November due at 10 a.m. ET.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

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Stock market rise

The stock market rally started out weak and continued to falter during the afternoon. Major indices pared losses afterwards but still posted devastating losses.

The Dow Jones Industrial Average fell just over 1% in stock market trading Thursday. The S&P 500 fell 1.45%, with Tesla and LRCX the worst performers. The Nasdaq Composite fell 2.2%. Small-cap Russell 2000 shed 1.3%.

Shares of Apple fell 2.4% to 132.23, not far from the June bear market low of 129.04. Dow Jones titan Microsoft gave up 2.55%, below its 50-day line after holding that key level since early November. Amazon stock fell 3.4%, undercutting the Covid decline in March 2020.

Nvidia fell by 7%, but found support at the 50-day line.

US crude oil prices fell 1% to $77.49.

The 10-year Treasury yield fell 1 basis point, to 3.67%. The two-year Treasury yield, which is closely linked to Fed policy, rose modestly. Markets still expect interest rates to rise by a quarter point in February and March.

Exchange Traded Funds

Among the ETFs that saw growth, the iShares Expanded Tech-Software ETF (IGV) was down 1.9%, with MSFT stock a major component. The VanEck Vectors Semiconductor Index (SMH) fell 4.15%. Nvidia, LRCX, and Micron stock are SMH’s notable holdings, but chip weakness has been widespread.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) fell 3.4%, dropping to a five-year low. The ARK Genomics ETF (ARKG) declined 1.1%. TSLA stock is a major holding across Ark Invest, but especially ARKK.

The SPDR S&P Metals & Mining ETF (XME) lost 1.75%. The US Global Jets ETF (JETS) was down 2.1%. The SPDR S&P Homebuilders ETF (XHB) was down 0.9%. The Energy Select SPDR ETF (XLE) cooled 2.3% and the Financial Select SPDR ETF (XLF) gave up 0.9%. The SPDR Healthcare Sector Selection Fund (XLV) fell 0.1%.

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Tesla stock

Tesla stock fell 8.8% to 125.35 on Thursday, marking its lowest level since September 2020 as the high-volume sell-off continued. Tesla doubled its year-end US delivery discount to $7,500 late Wednesday. It came as CarMax affordability concerns plagued automakers and dealers far and wide. TSLA stock lost nearly 36% in December alone.

However, Tesla’s Elon Musk, on a Twitter Spaces call Thursday night, said, “I will not sell stocks next year under any circumstances… I will not sell stocks until 2024-2025.”

Musk has sold nearly $39 billion in Tesla stock since shares peaked in November 2021, including another payment in mid-December. Musk has stated several times that he is done selling before withdrawing more shares.

However, Musk has made it clear that he will not tone down his politically charged tweets. “I’m not going to suppress my views just to increase the share price.”

Meanwhile, Wedbush analyst Dan Ives, an old Tesla bull, accused Musk of being “asleep at the wheel.” Ives lowered its fourth-quarter delivery target to 410,000-415,000 from 450,000.

He also cut his price target for Tesla stock to 175 from 250. Along with Canaccord on Friday morning, six analysts this week lowered their price targets or downgraded TSLA.

TSLA stock rose 1% in premarket trading.

Buckle up, Tesla stock fans, for a very fun 2023

Market rally analysis

The stock market rally was in a bearish mood on Thursday, with major indexes lower on the back of economic data and corporate news.

The S&P 500, which just regained its 50-day line on Wednesday, has been selling off Tuesday’s lows intraday. So did the Nasdaq, but both rallied to finish above Tuesday’s lows.

The Dow Jones just cut Monday’s lows for the day, but rebounded to close above the 50-day line.

While Apple, Amazon, Microsoft, and especially Tesla stocks look daunting, this isn’t just a huge sell-off. The Invesco S&P 500 Equivalent ETF (RSP) fell 1.1% on Thursday, returning below its 50-day line.

SMH’s chip ETF fell below the 50-day line, just a few days after jumping to its best in multi-months on Dec. 13, above the 200-day average. In contrast to the S&P 500, SMH closed below Tuesday’s lows.

Leading stocks took a hit again Thursday, with the exception of a few bullish or defensive growth names. Some metals and mining stocks are still looking good on the weekly chart.

The stock market is rising under intense pressure, just hanging on.

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What are you doing now

Market action continues to deteriorate, with trends turning decisively negative just after the opening on December 13th.

Market exposure should be minimal and only limited to jobs that are running. Even then, investors may want to take a partial profit or simply exit some trades with a gain.

At some point, the market will bounce back like it did on Wednesday. Don’t get carried away with a vigorous opening, or even a vigorous session.

Investors should work on their watchlists. Focus on stocks with strong relative strength or holding to key levels like the 50 day line, this gets tricky if the charts aren’t looking great at the moment.

Read the big picture every day to stay in sync with market trend, leading stocks and sectors.

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

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