My Weekly Stock Debrief (Dec. 19-23)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #51 of 2022 (Dec. 19-23), our weekly recap of the stock market performance.
This is my final weekly debrief of the year, and I wanted to take a moment to wish you all a happy holiday season. Thank you for your support and engagement throughout the year. I hope you have a chance to relax, recharge, and enjoy time with loved ones during this special time of year. All the best to you and yours in the new year.
1. Market Performance
The equity markets were mixed this week, with the S&P 500 and NASDAQ falling by 0.2% and 2.3%, respectively, while the Dow Jones rose by 0.9%.
The S&P 500 posted a third consecutive weekly loss due to persistent fears of an economic downturn. The Federal Reserve's hawkish comments from the previous week have continued to weigh on investor confidence.
The energy sector fared the best this week, as U.S. oil inventory figures were lower than expected. On the other hand, the consumer discretionary sector performed the worst, led down by Tesla's continued selling pressure, which dropped another 18% in 5 days.
The upcoming week will be a brief one, with the U.S. markets closed on Monday, yet some investors may wish for a "Santa Claus rally" to give the final week of the year an optimistic conclusion. However, with sentiment and technical indicators primarily bearish, we advise being cautious in the coming weeks.
2. SP500 Sector Performance
6 of the 11 S&P500 sectors closed the week higher. Energy led and closed up 3%, while Consumer Cyclical lagged and finished down 3%.
Year-to-date, only 1 sector is positive. Despite the volatility, Energy remains the indisputable winner of 2022 with a 57% gain. Communication Services and Consumer Cyclical are the worst performers in 2022.
3. SP500 Heatmap
59% of the SP500 stocks were up in the last 5 trading days.
Best performers:
NIKE, Inc. (NKE, 10%)
Charter Communications, Inc. (CHTR, 10%)
Halliburton Company (HAL, 9%)
Worst performers:
Caesars Entertainment, Inc. (CZR, -9%)
Norwegian Cruise Line Holdings Ltd. (NCLH, -9%)
Tesla, Inc. (TSLA, -18%)
4. SP500 Breadth
Short-term momentum is bearish, with 75% of the S&P 500 components trading below their 20-day moving averages.
This week still saw more new 52-week lows (28) than new highs (5).
Read more about moving averages
5. SP500 Daily Chart
The technical indicators for the S&P500 are bearish. The index is trading below its 20,50, and 200-day moving averages.
The uptrend, which has been in effect since mid-October, appears compromised after the index fell below the critical 3'900 support.
In addition, the MACD indicator is below its signal line, indicating potentially more pain ahead.
6. Market Sentiment
Fear & Greed Index
CNN's Fear & Greed Index tracks seven sentiment indicators and is published daily.
On Friday, the indicator closed at the "Fear" level (35), 8 points lower vs. the previous week. The VIX was down 8% to close below 21, still indicating a high level of market uncertainty.
AAII Investor Sentiment Survey
The American Association of Individual Investors surveys its members each week on the direction of the stock market for the next six months. The results are published weekly on Wednesdays.
The last AAII survey reported that 52% of the respondents had a bearish market outlook, a 7-point increase from the previous week. The market sentiment remains predominantly bearish.
7. Our Earnings Chart of the Week
Analysts predict that earnings for the S&P 500 will decline by 1.5% in Q4 2022. The earnings growth rate for 2023 is projected at 4.4%, lower than the 9% average seen over the last decade.
8. Best Tweets of the Week
9. The Week Ahead
All the S&P 500 companies have reported Q3 2022 earnings. 71% have exceeded analysts' projections on EPS, which is 7 points lower than the prior four-quarter average.
10. Trading Update
This week, our stock pick, Merck (MRK), was up 2.4% (Monday open to Friday close). In 2022, My Weekly Stock’s picks are up 15% cumulatively (no leverage, buy and hold for five days), and our options trading is up 135%.
Access our performance tracking here.
We will trade a stock in the Healthcare sector for the week ahead. Our stock pick will be released on Monday before the markets open. In the meantime, you can learn more about our trading approach in the article below:
Read more about our trading approach here.
That’s all for My Weekly Stock’s debrief for week #51 of 2022 (Dec. 19-23).
I hope you liked reading our market review for the week! If you have any comments or suggestions, please fill out the survey below:
Have a great week,
My Weekly Stock
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