Market Analytics and Considerations
Key Notes
- The market value of Tesla has fallen behind its rivals.
- Tesla fell 11.41%, sending the Nasdaq 100 down, while Treasury yields rose.
- Watch out for volatility as trading volume tends to be low during vacations.
As risk avoidance hit Wall Street during the first trading period following the Xmas break, volatility sprang back to life. This is consistent with past conduct within days before and following the holiday from 1990. The S&P 500 fell by approximately 0.4%, while the tech-heavy Nasdaq fell by about 1.4 percent. The blue-chip-focused Dow Jones, meanwhile, remained mostly unaltered.
Undoubtedly, Tuesday’s market action was abnormally negative for tech equities. This trend can be explained by taking a look at market estimates of how the Federal Reserve would set interest rates in the future. Since Thursday, speculators have increased interest rate increases expectations across all tenors, with two – year outlook seeing the largest improvement. The 10-year rate increased from across board as Treasury rates increased, reaching the highest levels since middle of November.
Tesla’s stock was also in the line of fire. Investors had to cope with Tesla’s statement that it would be cutting production at its Shanghai facility while tech stocks were falling. Despite China’s Covid-zero regulation being progressively reversed, this raised questions regarding demand. The nation said that the isolation for arriving traveler would be lifted.
The share price of Tesla fell by 11.41percentage points on Tuesday, the most since April 2022. This indicates that the stock has shed almost 73percent of its worth since its top in November 2021. As shown in the table following, its market valuation no longer dominates the sum of its top five competitors. While the market worth of Tesla fell 72%, that of its top 5 rivals fell by around 31percentage points since the previous year.
Source: Google+BBG
The risk of a significant economic event is low for Wednesday’s Asia-Pacific trade session. Be aware of implied volatility as trading volumes are still poor due to the vacations. The poor session on Wall Street is putting APAC equity markets at risk of suffering more falls. As a result, indices including the Hang Seng Index, Nikkei 225, and ASX 200 seem to be at risk.
Technical Analysis of the Nasdaq 100
The Nasdaq 100 seems to already have broken underneath a Bearish Flag signal configuration on the graph. Just at time of publication, verification is missing. The possibility of extending the main downturn increases if the downward continues to advance. The support region around 10484 & 10708 then would be brought into focus. The 200-day Simple Moving Average, meanwhile, still favors the downside.
Daily Chart – Nasdaq100
