U.S. stock indices declined in trading on Friday, December 3. Investors took advantage of their conservative right to have a quiet weekend and abstract away from surprises from the WHO or other health departments.
The Dow Jones held its ground. But the Nasdaq -1.92%
DJI lost only 0.17%. But the bears dealt a major blow to technology stocks. The Nasdaq is losing almost 2%, while the S&P 500 is down 0.84%. The sell-off was reflected in shares of the so-called FANG+ index.
These securities have been the best performers all year, but hawkish signals from the Federal Reserve are causing investors to prepare for higher interest rates, which could hit these particular corporations’ stock prices the hardest. Against this backdrop, investors have been moving into the safest assets, such as cash and U.S. Treasuries.
Pressure in NVidia
Shares of industry leader NVidia (NVDA) fell 4.46%, closing in negative territory for the second week in a row. The U.S. Federal Trade Commission, which acts as an antitrust agency, is trying to block the $40 billion acquisition of ARM from SoftBank Group Corp.
Despite the drop in the stock, analysts don’t see this news as defining. “Buying ARM would be good for NVDA’s business, allowing it to develop an ecosystem of processing centers, and we would like it to happen, but if it doesn’t happen, the company will save a lot of money.”
It is now about $75 billion, given the increase in value since the deal was announced. No one, frankly, had any hope that the deal would happen. In any case, everything will be all right with NVDA”, Market Watch reports the opinion of Bernstein analysts, who target it at $360.
Tesla, DocuSign and Didi
The sell-off on the Nasdaq could not have passed Tesla stock, which lost more than 6% and came close to the $1,000 psychological support level. Elon Musk has been fueling the bearish ideas with constant sales of his company’s securities, which have been going on for a month now.
Finally, an objective valuation has begun to approach DocuSign (DOCU) stock, which has collapsed 40%. A completely inadequate capitalization was finally dumped by financials with a negative earnings outlook.
Shares of DiDi Global (DIDU) fell by 22% on information about delisting from U.S. stock exchanges. The Chinese authorities were initially against the IPO in the U.S. and recommended that the company should refrain from this idea.
But DIDI showed its independence and now reaps the benefits. The company has already said it intends to seek a listing of its shares on the Hong Kong Stock Exchange, and then to ensure conversion of the U.S. depositary shares of ADS into new securities.
10 stocks for a Christmas rally
Amid pressure in FANG+ stocks, the topic of the Christmas rally is gaining particular urgency. Michael Brasch of Market Watch believes that concerns about the omicron stampede and inflation are greatly exaggerated, and recommends buying the market given the insider moves.
Analysts are accumulating ideas in anticipation of a Christmas rally. Photo: Yahoo
Corporate insiders, he says, have stepped up buying in cyclical papers that are concentrated in the travel, retail, energy and resources sectors
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Among all others, he highlights Six Flags Entertainment (SIX), American Eagle Outfitters (AEO), Nordstrom (JWN), American Woodmark (AMWD), Delta Air Lines (DAL) and Playa Hotels & Resorts (PLYA). He complements his recommendation with shares of Exxon Mobil (XOM), EOG Resources (EOG), Cleveland Cliffs (CLF) and Orion Engineered Carbons (OEC).
