Day Traders Diary

11/14/22

The major averages started the week to the downside as investors took a pause from last week's big rally and digested a slew of corporate and economic news. The Dow Jones Industrial Average fell 211 points, or 0.6%, to 33,536. The S&P 500 was lower by 0.89% to 3,957 while the tech-heavy Nasdaq Composite dropped 1.12% to 11,196.

Trading was choppy throughout the day, with the market struggling for direction throughout the session and then sliding into the close.

Earlier in the day, the major stock indexes came off their lows after Federal Reserve Vice Chair Lael Brainard indicated the central bank could soon slow the pace of its interest rate increases, providing some comfort to the market.

Brainard's remarks came after Fed Governor Christopher Waller said Sunday the endpoint for the federal funds rate is "still a ways out there." His remarks initially weighed on the market heading into the week.

Ahead of Brainard's comments, stocks took a big fall following reports that Amazon will lay off about 10,000 employees as early as this week. Around the same time, a Fed survey showed consumers' inflation expectations for the year ahead rose, weighing further on sentiment.

The S&P 500 rallied 5.9% to finish the previous week, its best weekly advance since June. Investors cheered a lighter-than-expected inflation reading, betting that the central bank would soon slow its aggressive tightening campaign.

The third-quarter earnings season is set to continue, with a heavy emphasis on retail. Walmart, Home Depot, Target, Lowe's, Macy's and Kohl's are all slated to post numbers this week.

Baird likes these tech stocks even after rough earnings season

Tech stocks have had a rocky third-quarter earnings season, but there are some names that stand out above the rest in the cloud software space, according to investment firm Baird.

"Amidst it all, public safety, and AXON in particular, was a stand-out. Among the mega-caps, we continue to like AAPL long term. Looking forward, based on continued strong cloud data trends, SNOW is our top idea among the companies still to report," analyst William Power wrote in a note to clients on Monday.

Power noted that cloud data names are trading at a "modest premium" to software-as-a-service, more broadly. Snowflake reports earnings on Nov. 30.