Market Review: December 28, 2022

Closing Recap

Wednesday, December 28, 2022





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     Only two days left after today for 2022, and still no Santa Rally in sight. Big tech and discretionary stocks continue to plague broader markets with shares of AAPL, AMZN, TSLA making new 52-week lows today, adding to their dreadful YTD losses. Rising interest rates by the Fed is beginning to take a toll on market sentiment, with hopes for a Fed “pivot” disappearing given the recent comments from the Fed – steadfast on higher rates for longer. The Nasdaq is at a new closing low for the year but still has not taken out the 10/13 intraday low (10,088.83). Also weighing on market sentiment (as well as a breakdown below recent key market support levels, including 3,800 on the S&P 500), were Covid concerns. Milan health authorities said that almost half of the passengers on two flights from China tested positive for Covid. Milan’s region health chief said at a press conference that airport authorities tested passengers who arrived on two flights, one from Beijing and one from Shanghai. China has seen outbreaks since the government there abandoned its strict zero-Covid policies – Bloomberg reported this morning. The news was followed that the US will impose mandatory COVID-19 tests on travelers from China, U.S. health officials said on Wednesday, joining India, Italy, Japan, and Taiwan. A spike in Treasury yields also pressured interest rate sensitive stocks/sectors, with the 10-yr above 3.88%.


Interesting Market Stats:

·     According to @Convertbond, in 2022, we have seen total up days: 100 for the S&P 500, the lowest number of positive days since 1976 vs. 250 trading days so far.

·     Trading volumes in the U.S.-listed options market are on track to smash another record as more than 41 million contracts have changed hands on an average day this year, a 5% jump from 2021 and the highest level since the market’s inception in 1973 – Options Clearing Corp. data

·     CNBC noted the five worst days of 2022 were: Sept 13th, -4.3% after “hotter” CPI reading, May 18th -4% after TGT earnings miss, June 13th -3.9% again on “hot” CPI data, April 29th -3.6% after AMZN miss and May 5th -3.6% following Fed meeting.


Economic Data:

·     Richmond Fed composite manufacturing index rises +1 in Dec vs -9 in Nov; shipments index +5 in Dec vs -8 in Nov; services revenues index -12 in Dec vs -2 in Nov

·     Pending Home sales index for November fell -4.0% to 73.9 vs. -4.6% prior month and estimate of down -1%; Nov Pending Home sales -37.8% from November 2021



·     Gold prices slip -$7.30 to $1,815.80 an ounce, dropping from yesterday’s 6-month highs on short-term profit taking as the dollar capped losses. Gold has risen around $200 from a more than two-year low, hit in September, on expectations that the U.S. central bank would slow its pace of interest rate hikes.

·     Oil prices bounce off lows, paring losses to -0.7% and settle at $78.96 per barrel (off lows $77.30), while natural gas futures slide -11% to $4.709/MMBtus, lowest levels since mid-March of this year on warming temperatures after the recent freeze. Oil prices dipped as traders weighed concerns over a surge in COVID-19 cases in China against the chances easing pandemic restrictions in the country will boost fuel demand.


Currencies & Treasuries

·     Digital assets have had a historically bad 2022, with the market capitalization of crypto tumbling below $800 billion from nearly $3 trillion in November 2021. Bitcoin has fallen by more than 75% over the same period.

·     Treasury yields a little bump mid-afternoon initially as US Treasury sold $43B in 5-yr notes at a yield of 3.973% vs. 3.965% when issued with bid-to-cover at 2.46 vs. 2.39 prior auction and indirect bidders awarded 64.51% and directs 18.56%

·     Bond prices, which move inversely to bond yields, have dropped by an average of 15% globally in 2022 as central banks have raised rates to curb inflation. The yield on the 10-year Treasury has now risen nearly 50-bps from its low on the day of the weaker-than-expected November CPI report on 12/13, touching highs of 3.88% today.

·     The U.S. dollar touched a one-week high against the yen, boosted by a jump in Treasury yields and investor expectations for a rebound in Chinese growth as COVID-19 curbs loosen. The dollar index (DXY) advances 0.2% as the greenback rises 0.6% against the yen and 0.2% against the euro. US economic data offer mixed signals.






WTI Crude















10-Year Note





Sector News Breakdown


·     TSLA shares rebound after 7-straight declines, down -69% YTD and at lowest levels in over 2-years. TSLA interesting stat from Charlie Bilello noting since 2010 IPO pricing, YTD returns as follows: 2010 (from IPO pricing): +57%, 2011: +7%, 2012: +19%, 2013: +344%, 2014: +48%, 2015: +8%, 2016: -11%, 2017: +46%, 2018: +7%, 2019: +26%, 2020: +743%, 2021: +50%, and heading into today for 2022 YTD: -69%

·     AMZN is working on a standalone app for watching sports content, the Information reported on Wednesday, citing a source with direct knowledge of the plan. It was not clear when Amazon will roll out the sports app and whether it will go through with the plan, according to the report.

·     CXW and GEO shares slip early after the Supreme Court said that a Trump-era border restriction known as "Title 42" will stay in effect while legal challenges play out. The 5-4 order is a victory for Republican-led states that ensures that federal officials will be able to continue to swiftly expel migrants at U.S. borders at least for the next several months


Energy, Industrials and Materials

·     Coal names tumble (ARCH, BTU, CEIX, HCC) alongside the drop in natural gas futures (down -12%) as temperatures warm after the recent deep freeze

·     Solar stocks slide again (SEDG, ENPH, SPWR, FSLR) amid end of year selling pressure

·     Railroads CSX and UNP warn of shipment delays extending into next few days as cross-country winter storm, plunged some cities into deep freeze over Christmas and crippled operations

·     GNRC initiated at Buy and $160 tgt at Janney noting shares are down ~80% from their peak, represent an opportunity to own an established brand – GNRC has an ~80% market share of the residential standby ("HSB") generator market

·     OSK wins contract estimated to be worth over $100 million to produce armored personnel carrier hulls for the Israeli military, according to a statement from Israel’s Defense Ministry

·     SPH said to buy a platform of renewable natural gas (RNG) assets from Equilibrium Capital Group for $190 mln for the two operating facilities, along with transaction fees and expenses

·     XOM is suing the European Union in a bid to force it to scrap the bloc’s new windfall tax on oil groups, arguing Brussels exceeded its legal authority by imposing the levy, the Financial Times reported.



·     Banks (BAC, C, JPM, PNC, WFC) one of the few bright spots for major averages today in the S&P

·     MSTR announced that during the period between November 1 and December 21, it acquired approximately 2,395 bitcoins for approximately $42.8M in cash, at an average price of approximately $17,871 per bitcoin, inclusive of fees and expenses



·     AZN said Calquence approved in Japan for adults with treatment-naïve chronic lymphocytic leukemia; Calquence significantly increased time patients lived without disease progression or death versus. Chemoimmunotherapy

·     California wants to revoke a CVS mail-order license for illegally filling opioid and ADHD prescriptions – STAT News reported

·     CLNN said its investigational COVID-19 treatment, CNM-ZnAg, did not meet the main goal in a mid-stage trial; drug did not show any clinical benefit, compared with placebo in non-hospitalized acutely symptomatic COVID patients

·     JNCE announced GILD has acquired all rights to JNCE’s Phase 1 clinical candidate GS-1811 (anti-CCR8 antibody) for $67M cash, and Gilead will be solely responsible for all further R&D and commercialization of GS-1811

·     KALA said the FDA accepted its investigational new drug application for the treatment of an eye rare condition through its KPI-012 product candidate

·     NERV shares slide after the FDA said its "refusal to file" status remains in effect for its experimental therapy targeting negative symptoms of schizophrenia

·     PFE said the FDA agreed to review a biologics license application for the investigational pentavalent meningococcal vaccine candidate called MenABCWY

·     TGTX rises after the FDA approved its drug for patients with relapsing forms of multiple sclerosis


Technology, Media & Telecom

·     SMH down for a 4th straight day and 9 of last 10 as semis remain a drag on the Nasdaq – Philly semi-index (SOX) remains down nearly -37% YTD (down -12.75% in December alone)

·     Cantor Fitzgerald outlines top technology picks for 2023, which include UDMY, GDYN, PANW, RIOT, RIVN and DGII as top picks span across multiple sectors, from cybersecurity to crypto, and every one of our top picks is down more than 25% YTD, absent of DGII (+51%)

·     Infineon (IFNNY) CEO says co is ready to spend several billion euros on the right takeover target; co has said that it sees growth, particularly electromobility, autonomous driving, renewable energy, data centers and IoT – Reuters

·     The Information reports Instacart slashed its internal valuation by another 20% to $10B (~75% below what investors paid for shares early last year)

·     Trendforce says iPhone shipments may drop 22% in 1Q labor crunch; ests ’22 iPhone 14 production of 78.1M units

·     China’s video games regulator granted publishing licenses to 45 foreign games for release in the country. Among the imported online games approved by the National Press and Publication Administration are five to be published by Tencent Holdings (TCEHY) such as "Pokémon Unite" by Nintendo (NTDOY) and "Valorant" by Riot Games, according to a list the regulator released


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.