Zinger Key Points
- The market is entering the final trading week of the year with hopes of at least a mild Santa Claus rally.
- The S&P 500 Index has lost about 19.3% for the year-to-period.
- Get New Picks of the Market's Top Stocks
The index futures point to a moderately higher opening on Tuesday, as traders return to their desks after an extended holiday weekend in observance of Christmas. In the absence of any major trading cues, a couple of house price readings could guide sentiment. Trading volume could be light, lending less credibility to any potential move.
U.S. stocks closed the week ended Dec. 23 on a mixed note, as weak housing readings and bad tidings from the tech space served to keep sentiment subdued in a volatile week. The broader S&P 500 Index fell modestly and the Nasdaq Composite experienced a steeper loss, with both the averages recording losses for a third straight week. The blue-chip Dow Industrials average advanced moderately for the week. Atypically, trading volume for the week was high.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq Composite | -1.94% | 10,497.86 | |
| S&P 500 Index | -0.20% | 3,844.82 | |
| Dow Industrials | +0.86% | 33,203.93 |
The Santa Claus rally that is typical of the year-end hasn’t kicked in yet. “Given the challenging year for U.S. equity markets, including what could be one of the worst Decembers for the S&P 500 since 1950, investors are hoping Santa can deliver some positive returns and holiday cheer as we approach year-end,” LPL Financial’s chief technical strategist Adam Turnquist said.
Carson Group’s Ryan Detrick shared an interesting data point regarding the day after Christmas historically being the best day of the year for the S&P 500. The index has gained 0.50% on average on this day.
The day after Christmas (Dec 26) is historically the best day of the year for the S&P 500, up 0.50% on average.
— Ryan Detrick, CMT (@RyanDetrick) December 27, 2022
Of course, the NYSE was closed on this day in 2022, but will things just be pushed back a day? pic.twitter.com/M2B8aNHb4i
Here’s a peek into index futures trading:
| Index | Performance (+/-) | |
|---|---|---|
| Nasdaq 100 Futures | +0.69% | |
| S&P 500 Futures | +0.72% | |
| Dow Futures | +0.71% | |
| R2K Futures | +1.19% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY rose 0.67% to $385.48, while the Invesco QQQ Trust QQQ gained 0.64% to $269.07, according to Benzinga Pro data.
On the economic front, the S&P/Case-Shiller house price index is scheduled for release at 9 a.m. EST. The 20-city composite house price index is expected to have declined 1.1% month-over-month in October compared to a 1.2% drop in September. The year-over-year increase in the seasonally unadjusted house prices may have slowed from 10.4% to 8.2%.
Around the same time, the Federal Housing Finance Agency will release its house price index for October. The month-over-month change is expected at a negative 0.6% in October compared to a 0.1% increase in September.
At 10:30 a.m. EST, the Dallas Federal Reserve is due to release its manufacturing business index for December.
The U.S. Treasury is expected to auction 52-week and three-month bills, and 2-year notes at 11:30 a.m. EST and 1 p.m. EST, respectively.
See also: Futures investing for beginners
Stocks In Focus:
- Tesla, Inc. TSLA stock was down in premarket trading, portending the extension of the losing streak to a seventh straight session. Over the weekend, reports said the electric vehicle maker shuttered its Giga Shanghai plant earlier than expected on Saturday.
- Shares of Southwest Airlines Co. LUV pulled back by over 3.40% amid the cancellation of several of its flights due to the winter storm.
- Chinese e-commerce companies Alibaba Group Holding Limited BABA, JD.com, Inc. JD and Pinduoduo, Inc. PDD rose over 2.50% each.
- Nio, Inc. NIO shed over 1% after it downwardly adjusted its fourth-quarter deliveries guidance. The EV maker held its annual Nio Day 2022 on Saturday, where it announced the new EC7 coupe and the all-new ES8 flagship sedan.
Commodities, Other Global Markets:
Crude oil futures were seen snapping a five-session winning streak. On Tuesday, a barrel of WTI-grade crude oil traded up about a percent to $80.31.
The 10-year U.S. Treasury note’s yield edged down after it topped 3.7% last week, and was nearly flat at 3.745%.
The major markets in the Asia-Pacific region that were open for trading closed higher for the session. The Chinese and Indonesian markets led the gains, while the Australian, New Zealand and Hong Kong markets remained closed for extended Christmas holidays.
European stocks have opened higher and were firmly in positive territory in late-morning trading. The U.K. market remained shut.
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