Here are the top news, trends, and analysis investors need to get their trading day started:
1. Nasdaq will decline again as Big Tech slide continues
Traders work on the trading floor of the New York Stock Exchange.
US stock futures were mostly lower on Tuesday, pointing to a 1.4% decline in the Nasdaq, a day after the index fell nearly 2.5% in its worst one-day decline in nearly a month . Tech stocks continued to decline in the pre-market on Tuesday, with Apple falling another 2% after falling nearly 3% on Monday.
Dow’s Home Depot share fell 2% in premarket trading amid fears that sales growth in the Covid pandemic will not last. A share decline of this magnitude would severely detract from modest year-to-date earnings.
The S&P 500 fell nearly 0.8% on Monday, a fifth straight decline, its worst streak in nearly a year. The Dow Jones Industrial Averaged bucked the downtrend on Monday and closed a little higher. It’s that time again on Tuesday morning. All three equity benchmarks remained stronger over the month.
2. Bond yields rose this week ahead of Powell’s statement
Federal Reserve Chairman Jerome Powell speaks during a virtual press conference in Tiskilwa, Illinois, United States on Wednesday, December 16, 2020.
Daniel Acker | Bloomberg | Getty Images
Federal Reserve Chairman Jerome Powell travels to Capitol Hill twice this week to appear before the Senate Finance Committee on Tuesday and the House Financial Services Committee on Wednesday. Rising bond yields and the associated fears of inflation increase interest in Powell’s statements. The yield on 10-year government bonds, which is reversing the price, was a little lower on Tuesday morning. But it’s been up lately, trading around 1.36%. On Monday it was 1.39%, the highest level in about a year.
3. Bitcoin drops below $ 50,000; Tesla stocks are falling again
Costfoto | Barcroft Media | Getty Images
Bitcoin fell 12% Tuesday morning and fell below $ 50,000. The world’s largest digital currency, which is still up 60% this year, hit an all-time high of over $ 58,000 on Sunday. Price fluctuations of more than 10% are not uncommon in crypto markets. Bitcoin soared to nearly $ 20,000 once in 2017 before losing 80% the following year. Treasury Secretary Janet Yellen warned of these wild swings on Monday.
Elon Musk, CEO of Tesla, speaks at a delivery ceremony for the Tesla China-made Model 3 in Shanghai, east China, on Jan. 7, 2020.
Ding Ting | Xinhua News Agency | Getty Images
Tesla shares, which revealed an investment in Bitcoin earlier this month, fell another 6% on Tuesday ahead of the market. The stock fell more than 8.5% on Monday, the largest decline since the end of September 2020. However, other technology stocks also suffered heavy losses on Monday. Elon Musk’s electric car maker shares rose just 1.25% this year ahead of Tuesday’s trading. However, in the past 12 months, Tesla rose nearly 300%.
4. Home Depot, Macy’s Report Better Than Expected Quarterly Results
A Home Depot store can be seen in Washington, DC on August 18, 2020.
NICHOLAS COMB | AFP | Getty Images
Home Depot’s fourth-quarter profits and sales surpassed expectations on Tuesday as consumers continued to invest in their homes amid the pandemic and strength of the real estate market. However, shares fell on comments from Home Depot’s CFO asking how long the pandemic would last and how that could affect consumer spending.
People wear face masks as they walk through Herald Square in New York City on January 8, 2021.
Angela Weiss | AFP | Getty Images
Macy’s shares rose more than 3.5% in the pre-market after the retailer reported its first quarterly profit in a year on Tuesday morning. Fourth quarter sales also beat estimates as the company’s efforts to reduce inventory levels during the holiday quarter and rely less on deep discounting pay off. Ahead of Tuesday’s trading, Macy’s shares rose 35% this year despite struggling for the past 12 months.
5. Electric car manufacturer led by a former Tesla engineer to go public
The Lucid Air sedan, which is slated to go into production at a facility in Arizona next year.
Electric vehicle maker Lucid Motors plans to bring a combined equity valuation of $ 11.75 billion to the stock market through a reverse merger with a blank check company. The deal between Lucid of California and Churchill Capital Corp IV is the largest in a series of such collaborations involving EV companies and special-purpose acquisition companies better known as SPACs. CCIV’s shares fell more than 30% in the pre-market. Speculation about the deal drove SPAC shares up 470% this year alone. Lucid is run by ex-Tesla engineer and automotive veteran Peter Rawlinson.
– Follow all developments on Wall Street in real time with CNBC Pro’s live market blog. Find out about the latest pandemics on our coronavirus blog.