Stocks Just Had Their Worst Week Since the Election as General Motors Out-Dazzled Tesla

Stocks pulled back last week as big Nasdaq stocks like Tesla stalled and investors looked for opportunities in newer names like General Motors.

The S&P 500 slid 1.5 percent between Friday, January 8, and Friday, January 15. It was the index’s sharpest decline since the week ended October 30. The Nasdaq-100 slid 2.3 percent, while the Russell 2000 rallied 1.5 percent. That divergence between big and small has been typical lately as money shifts to value stocks and newer companies.

Biggest Gainers in the S&P 500 Last Week
Etsy (ETSY) +16%
General Motors (GM) +16%
Eli Lilly (LLY) +15%
ViacomCBS (VIAC) +13%
Occidental Petroleum (OXY) +12%

Consider last week’s two biggest gainers in the S&P 500. Etsy (ETSY), only added to the index in September, led the charge after analysts said increased traffic on its website would translate into higher sales. General Motors (GM) was the second-best performer after showcasing its BrightDrop electric-vehicle program and a flying Cadillac.

A 15-year e-commerce disruptor and 112-year-old icon adapting to a zero-emission future. Growth and value at the same time. Few pairings illustrate more clearly the incredible breadth of this bull market.

Energy Leads Again

Energy stocks led the market for the second straight week, up more than 3 percent. They benefited from oil holding its ground above $50 and investors feeling more confident about the global economy.

Speaking of the global economy, China’s gross domestic product expanded 6.5 percent in the fourth quarter. It was 0.4 percentage point higher than expected. Economists see the Asian giant accelerating further as consumer spending returns.

S&P 500, daily chart, with 50-day simple moving average (SMA) and 21-day exponential moving average (EMA).

Retailers, housing, banks and semiconductors also rose last week. Communications and technology stocks fell the most.

U.S. Economy Limping

Last week’s economic data for the U.S. was broadly negative. Initial jobless claims rose much more than expected. Retail sales for the key month of December missed by 0.7 percentage point and consumer sentiment for January disappointed. Still, investors are looking past the weakness in hope of aggressive stimulus when the Biden Administration takes office this week.

Biggest Decliners in the S&P 500 Last Week
Twitter (TWTR) -12%
Paycom Software (PAYC) -10%
Steris (STE) -9.1%
DexCom (DXCM) -8.7%
Rollins (ROL) -8.7%

This week is more focused on earnings, which will flow more heavily in coming weeks.

Bank of America (BAC), Goldman Sachs (GS) and Halliburton (HAL) report this morning. Netflix (NFLX) follows after the closing bell.

Tomorrow features the Presidential Inauguration, NAHB’s homebuilder sentiment index, Morgan Stanley (MS), Procter & Gamble (PG) and United Airlines (UAL).

Thursday has jobless claims, housing starts and building permits. Intel (INTC), Union Pacific (UNP), CSX (CSX) and International Business Machines (IBM).

Existing home sales are due Friday.

This article was written by David Russell, TradeStation Securities, Inc., part of the Monex Group Inc, published on 19/01/2021.

David Russell
David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.

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