Day Traders Diary

11/7/22

The major averages closed higher to start the week as investors looked ahead to a packed week with congressional midterm elections and key inflation data on deck over the next few days, and shrugged off a supply warning from Apple. The Dow Jones Industrial Average traded higher by 423 points, or 1.31%, while the S&P 500 gained 36 points or 0.97%. The Nasdaq Composite rose 89 points or 0.85%, after trading between gains and losses earlier in the session. All three major averages notched a second straight day of gains.

Apple shares gained roughly 0.4%, despite falling more than 1% previously in the session, after the tech company said iPhone production has been temporarily reduced because of Covid-19 restrictions in China. Palantir shares, meanwhile, declined 11.5% after the company posted disappointing quarterly results. Carvana tumbled about 15.6%.

Facebook parent Meta gained 6.5% following a Wall Street Journal report that said the company could start layoffs as soon as Wednesday.

Key elections and economic reports ahead Tuesday's midterm election will determine which party will control Congress, and affect the direction of future spending. Democrats currently control the House, and have a majority in the Senate.

Investors could approve of a potential gridlock that may come out of the midterm elections as a Democratic president, with a Republican or split Congress, has historically meant above-average gains, according to RBC's Lori Calvasina in a Monday note.

On the economic front, investors are anticipating that Thursday's consumer price index report will give further insight into how far the Federal Reserve needs to go to bring down inflation. A hot report could signal to investors that a pivot from a prolonged period of higher interest rates may not be imminent.

Retail trade is leading the Dow higher, with Walgreens Boots Alliance's 4% jump on news that it would spend $3.5 billion to support VillageMD's acquisition of urgent care provider Summit Health. The company also raised its 2025 sales goal for U.S. health care business. Home Depot and Walmart also rose.

Tesla among stocks hitting 52-week lows Monday A group of stocks slipped to their lowest levels in a year on Monday even as the broader market fought to hold onto gains ahead of the November 8 midterm elections. Tesla shed 4.3% to hit the lowest level for the electric automaker stock since June 2021. The company, led by Elon Musk, has shed more than 43% year to date.