Stock Market Losses Grow On Bad Start To 2023; Tesla crashes 13%; Apple 52-week minimum

Stock indices reversed after an opening rally and were sold through lunchtime on the first trading day of 2023. tesla (TSLA) plunged nearly 13% to a two-year low after missing delivery estimates. Gold rose to a six-month high as the 2% inflation mantra drew a crowd of skeptics.




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The end of the tax sales season and a clean slate encouraged investors to pick up depressed stocks early Tuesday, but bearish macroeconomic issues caused the bears to kick in.

The Dow Jones industrial average fell 0.6% in the first half, while the S&P 500 lost 0.9%. Small-caps attracted interest early on as positive seasonality took over, but the Russell 2000 matched blue-chip losses at lunchtime. The Nasdaq Composite led the decline, down 1.3%.

Nasdaq and NYSE volume increased by double-digit percentages compared to the first half of the holiday session on Friday.

The yield on the 10-year Treasury note fell about 2.3%, or 8 basis points, to 3.80%. Crude oil fell more than 3.4% to $77.60 a barrel. European markets rose in unison while Asian markets were mixed, weighed down by the Nikkei’s 1.3% loss.

In the crypto world, Bitcoin remained above November lows, trading around $16,600, while coin base (COIN) traded just above last week’s record low at 31.83.

The S&P 500 and Nasdaq are trading below their 50 day moving averages. The Dow opened the session just above its 50-day line and broke support, but the index remains solidly above its 200-day line. The current IBD outlook remains “correcting market.” Investors are advised to keep their gunpowder dry while market trends are revealed in early 2023.

Stock Market: Next Week

December jobs data will dominate this week’s economic reports, with JOLT, ADP and Friday’s Nonfarm Payroll report also due. However, corporations are likely to hold off on big job cuts until January or February to avoid worker backlash and bad press during the holiday season. As a result, the February data may be much more illuminating. The Fed minutes and ISM manufacturing mark the main events on Wednesday’s economic calendar.

Dow Jones Component Walgreens Boot Alliance (WBA) reports earnings on Thursday. The drugstore chain recently failed in an attempt to move above its 50-day and 200-day moving averages. WBA stocks have been stuck in a downtrend since peaking in 2015.

troubled retailer bed bath and beyond (BBBY) is also scheduled to report that day.

Apple at 52-week low

Dow Jones component and technology icon Apple (AAPL) completed a double-top collapse after a week-long test, falling to an 18-month low. AAPL shares were trading 4.2% lower at lunchtime.

A final intermediate support level could come into play around 120, perhaps in time for the January 26 earnings report. However, it is not advisable to overthink dips in this dangerous market environment because bear markets often do not care about technical support levels, at least during active dips.

Gold in maximum of six months; impulse builds

SPDR Gold Trust (GLD) rose to a six-month high on Tuesday morning, completing a successful test at the 200-week moving average. The yellow metal bottomed out as the Federal Reserve completed the fourth quarter transition from 75 basis point hikes to 50 basis points.

Gold ended a four-year slide in early 2016, after testing the $2,000 level in 2011. It completed a round trip to the previous peak in August 2020 and began a base pattern that was broken last September. The contract and fund have now reassembled broken base support, signaling further momentum and buying interest. However, there is still a ton of resistance above 180 at the bottom and around $1900 in the futures contract.

The rally suggests skepticism about the central bank’s obsession with a return to the 2% inflation rate, which has characterized the past decade. At some point, the bankers will admit that those days are gone for now, and possibly our lives, as core inflation returns to much higher levels in the long run. That admission could trigger a quick breakout of gold to all-time highs.

Stock market movers and shakers

Tesla sold at 108 last week and bounced above 124 as 2022 came to a close. It offloaded nearly 13% as of midday Tuesday after reporting fourth-quarter deliveries of 405,000 and 1.3 million vehicles for the full year. This marked a year-on-year growth of 40%, which was below estimates.

The EV automaker has chipped away from a December 28 low around 108, but TSLA shares traded around 104 in the pre-market that morning. More importantly, this looks like a classic test of “round number” support at 100, with sell stops and buy orders naturally congregating around those psychological levels.

The IBD Innovative 50 ETF (ffty) matched first-class losses, down 1.1%.

IBD Component 50 Griffon (GFF) pulled back from the top of a six-week flat base that crossed the 33.63 buy point buy zone. GFF shares are trading near an all-time high.

The building construction manufacturer has posted double- or triple-digit earnings growth in each of the past four quarters.

Wynn Resorts (WYNN) Y las vegas sands (LVS) both rose more than 3.0% after Wells Fargo updates, in reaction to the reopening of China’s economy and its impact on Macau casino revenue.

At the same time, the Macau Gambling Inspection and Coordination Office has just reported that December revenue fell 56% after a similarly ferocious drop in November.

Those dire numbers, on top of already depressed revenue, highlight the difficult road ahead for both resort operators.

Follow Alan Farley on Twitter at @msttrader.

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