Day Traders Diary

11/29/22

The major averages were quiet all day as traders struggled to recover from sharp losses suffered in the previous session and looked ahead to more economic data. The Dow Jones Industrial Average closed up 3 points. The S&P 500 fell 6 points while the Nasdaq Composite shed 65 as Apple fell 2%.

Investors are watching for data coming later this week on topics such as gross domestic product and jobs for insight into how the economy is performing. And they are waiting for Federal Reserve Chair Jerome Powell's scheduled speech at the Hutchins Center on Fiscal and Monetary Policy at Brookings on Wednesday for clues into whether the central bank will slow or stop interest rate hikes.

Tuesday's ticks downward follow steep losses Monday, with the Dow dropping nearly 500 points and the S&P 500 and Nasdaq each losing more than 1%, after protests in mainland China against the country's zero-Covid policy started over the weekend. The protests elevated concerns over the potential for Chinese Covid protocols that could once again hamper global supply chains.

Overnight, however, global markets seemed to catch a reprieve as a Chinese official told reporters that 65.8% of people "over age 80" had received booster shots. On top of that, the government reported the first decline in Covid infections within mainland China in more than a week. This contributed to a rally in the Hong Kong and Shanghai markets.

Next two weeks can help investors, policymakers better understand future of markets, investment director says

The next 10 to 14 days will be a "data-rich period" that will help investors and policymakers alike see how inflation and growth will be balanced going forward, said Bill Northey, senior investment director at U.S. Bank.

Northey said he'll be watching closely for the labor report coming Friday for any signs of economic tightening. Next week, he said he'll be watching the producer price index for insights into if inflation is cooling.

Loop Capital is staying bullish on shares of Apple even amid concerns that China's Covid-19 lockdowns could weigh on iPhone Pro production.

"The long and the short of it is that while we believe Street could have estimates set too high for Dec [quarter] – Jun Q ... we believe some degree of this is in the stock ... while also now seeing a commensurate revenue and EPS upside opportunity beginning in the Sep Q '23," wrote analyst Ananda Baruah in a note to clients Tuesday.

Amid an uncertain demand backdrop and supply constraints, Baruah said expected units for the December period could move as much as 10 million units lower.

The analyst maintained the firm's $180 price target, suggesting shares could rally 25% from Monday's close.