Market Review: December 16, 2022

Closing Recap

Friday, December 16, 2022





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     Stocks continued their slide today as the markets continue their pace for first down month of December since 2018. In 2018, like 2022, Fed Chair Powell was raising the Fed Funds rate, a total of 3-times between June and December to a high of 2.50%. Powell pivoted by August 2019 and the markets took off (despite a brief Covid plunge). This time however, the Fed’s hawkish stance keeps squashing the hopes of traders looking for a Fed pivot. Today, with Fed Fund rates at 4.50%, the San Francisco Fed’s Mary Daly today stated she didn’t know why markets were so bullish on inflation abating, calling it “toxic” and saying, “we do not want to repeat the mistake of not doing enough to beat inflation.” Despite a growing chorus of critics, the Fed (and a very hawkish ECB) seem prepared to err on the higher rate side risking a ravaged economy versus the mistake of pivoting too soon. In a pre-market speech NY Fed’s John Williams declared “real interest rates need to become restrictive and stay there.”

·     A late day bounce on today’s volume heavy and volatile “quadruple witch” options expiration day prevented stocks from closing at daily lows. The S&P 500 fell a little over 1%, while the tech-laden Nasdaq 100 and the old school Dow Industrials each did slightly better, losing a little less than 1% each. On the week the S&P 500 & Nasdaq 100 lost roughly 3% while the DJIA fell about 2%.

·     On the macro front treasuries moved lower as their yields continued to climb. On the commodities front Brent crude oil ended the day 2.67% lower, fending off a brief noon-time spike when the Biden administration announced they will kook to begin repurchasing oil for the SPR in February. This morning’s major data release, the Purchasing Managers’ Index (PMI) indicators showed a contraction in the services and manufacturing sectors.


Economic Data:

·      U.S. S&P global December Flash Composite PMI fell to 44.6 (vs 46.4 in November)
U.S. S&P December Flash Services PMI also came in lower at 44.4 (vs 46.2 in November)
U.S. S&P global December Flash Manufacturing PMI was 46.2 (vs 47.7 in November)



Top Stocks Movers on Day

·     GH shares tumble and EXAS shares jump after results from a study using its blood test to screen for colorectal cancer that didn’t appear to surpass Exact Sciences’ stmple screening test. Guardant’s test demonstrated 83% sensitivity in detecting individuals with colorectal cancer where EXAS 2nd-generation version of its test Cologuard showed overall sensitivity of 95.2%

·     In software sector, ADBE gave an upbeat business outlook and reported better-than-expected fiscal fourth-quarter results.

·     In steel sector, United Steel (X) guided Q4 EPS above views, better than the weaker guidance issued by peer NUE the day prior which sunk shares

·     Solar stocks active (FSLR, SPWR, RUN, SEDG, ENPH) after California lowers financial incentives for rooftop solar panels in rules overhaul; the changes approved by the California Public Utilities Commission lessens the overall financial incentive for selling excess power back to utilities

·     Today’s higher rates have hurt the REIT sector with names such as PLD, INVH, SBAC, EQR, CCI, and AMT under pressure.

·     Digital World Acquisition (DWAC) fell after reporting that 3 executives have left the company since late November including their CFO.

·     On the crypto front, Bitcoin moved off of 24-hour lows late in the day to the $16,920 level, -3%. Crypto exchange Coinbase (COIN) and crypto bank Silvergate (SI) both made fresh 52-week lows.

·     Tesla Inc. (TSLA) also notched fresh 2-year lows as investors voiced their opinion on CEO Elon Musk’s pre-occupation with Twitter controversies with sell orders after a week of negative stories concerning weakening demand for Tesla’s EVs.

·     Maxar Technologies (MAXR) announced it was to be acquired by Advent International for ~$6.4B ($53/share), a ~129% premium to Thursday’s close. The deal expected to close in mid-2023.


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.