Weekly News 2022/12/26-2022/12/30

 On Friday, the three major US stock indexes collectively closed down. The Dow Jones Index fell 0.22% to 33,147.25 points; the S&P 500 Index fell 0.25% to 3,839.50 points; the Nasdaq Composite Index fell 0.11% to 10,466.48 points. Ended its worst year since 2008. And both ended a three-year winning streak. In 2022, the Dow has fallen 8.78%, the S&P has fallen 19.44%, and the Nasdaq has fallen 33.10%.

Stubborn inflation in the US and aggressive rate hikes by the Federal Reserve weighed heavily on investor sentiment throughout the year. Growth stocks represented by technology stocks have continued to decline this year. Several technology giants with a market value of trillions of dollars have collapsed one after another. Traditional blue-chip stocks have performed even stronger under this circumstance.

As the calendar enters the new year, some investors believe the pain is far from over. Analysts said, “There may be bumps in the first quarter, and the Fed may last longer. But I would like to tell you that there is a possibility that macro conditions will suddenly improve next year.”

For U.S. stocks, after this year's decline, the chances of another annual decline in 2023 are low. Because since 1928, the S&P 500 has fallen in two consecutive years only four times.

Some strategists are optimistic about the trend of U.S. stocks next year, listing some positive factors such as the resilience of the U.S. economy and a slower pace of interest rate hikes. Analyst Dan Ives said in his latest report that U.S. technology stocks will rebound sharply next year after a slump this year, as listed companies struggle to maintain their profitability and the Federal Reserve winds down its interest rate hikes.

 Tesla (NASDAQ: TSLA) analysts maintain an overweight rating with a target price of $252 per share. Recently, Ben Kallo, an analyst at Baird, an American investment bank, maintained Teslas “outperform” rating in his latest report, with a target price of $252 per share. Kallo believes that Tesla's profits will continue to expand next year, benefiting from the new factory's production, Tesla can continue to promote economies of scale. “The Austin and Berlin Gigafactories should be able to improve margins QoQ in 2023, and we continue to believe Tesla is the best positioned EV maker in the short and long term.”

Google (NASDAQ: GOOGL) to pay US state of Indiana $20 million to settle a privacy lawsuit. Indiana Attorney General Todd Rokita announced that Google will pay the state of Indiana $20 million to resolve the state's lawsuit against the tech giant's alleged deceptive location-tracking practices.

The director of TSMC (NYSE: TSM) revealed that he is worried about water shortage next year. Last year, the Nanke plant reduced its water supply by 15%. According to the news, TSMC is aggressively expanding its Nanke plant and advancing manufacturing processes. However, due to the tight water conditions, TSMC executives privately revealed on the 29th that “there is indeed a concern about water shortages next year.” Strengthen water supply readiness. According to TSMC statistics, last year when the water shortage in the Nanke plant was the worst, the water supply was reduced by 15%. In the second quarter of next year, the reclaimed water plant is expected to supply 20% of the water consumption of the Nanke plant.

 In 2022, cryptocurrencies such as Bitcoin ended their three-year upward trend and fell sharply. The price of Bitcoin has fallen by 65% since the beginning of the year, as central banks around the world have taken aggressive actions to combat cryptocurrencies in order to reduce inflation. In addition, the negative catalyst unique to the cryptocurrency industry, the FTX crash, further dampened investor confidence in the cryptocurrency industry, and this pessimism may continue into 2023.

Analyst's forecast for 2023 CredibleCrypto believes that if Bitcoin is below $16.5 thousand, the BTC price can only rise to $15,600.

Analysts said that “the probability of an economic recession in 2023 is quite high,” and that the cryptocurrency market will struggle to return to 2021 levels in the short term. They expect the correlation between cryptocurrencies and stock prices to “return to elevated levels.”

“In similar previous cycles, equities have never bottomed out at the start of a recession, and looking at our equity coverage and expecting generally lackluster Q4 earnings in January and February, the outlook for equities in early 2023 Doesn't seem optimistic.”

On a positive note, however, analysts noted that Bitcoin appears to have found some support around $16,000, while Ethereum's platform economy has “never been stronger.”

However, while analysts remain bullish on cryptocurrencies and bitcoin from a long-term perspective, they conceded that “it may be at least about 2 years before a potential bull market returns.”

 Gold prices rose on Friday, posting their best quarterly performance since June 2020, helped by expectations of a slower pace of Federal Reserve interest rate hikes after retreating from record highs. Gold prices have only fallen by about 0.5% in 2022, and the Fed's successive rate hikes will cause gold prices to hit their lowest in more than two years in September, but prices have since pared losses. It is expected to close higher next week, and the market hopes that the Federal Reserve will further slow down the pace of interest rate hikes in the new year, and the US dollar index continues to be under pressure. But in the new year, investors still have to guard against “tail risks.”

“The inflation data we've seen recently, showing prices are starting to cool off a little bit, is encouraging for metals bulls and part of the reason we're seeing a bounce,” said senior analyst Jim Wyckoff.

Vandana Bharti, assistant vice president of commodity research at SMC Global Securities, said investment inflows into gold exchange-traded funds (ETFs) could improve in 2023 after suffering massive outflows this year.

“After a two-year period of consolidation, precious metals are poised to move higher,” said Avi Gilburt, founder of ElliottWaveTrader.net recently. He expects gold to steadily break above $2,000. Been bidding its time for the next rally to $2100.

Spot silver fell 0.4% to $23.79 an ounce, platinum rose 0.9% to $1,063.43 and palladium fell 1.6% to $1,784.76. Silver and platinum are on track for annual gains, while palladium is on track for a 5.6 percent drop this year.

 Oil prices closed higher on Friday, posting their second straight annual gain. Oil prices have fluctuated wildly in 2022, briefly surging on tight supplies caused by the war in Ukraine, before slipping on weaker demand from the top importer and fears of an economic contraction.

Oil prices soared in March, with international benchmark Brent hitting $139.13 a barrel, the highest since 2008, as global crude imports and exports were affected by Russia's invasion of Ukraine. Prices cooled rapidly in the second half of the year as central banks raised interest rates and stoked recession fears.

ING analyst Ewa Manthey said: “This year has been an unusual year for the commodity market, with supply risks leading to increased volatility and higher prices, and next year will be another year of uncertainty with high volatility. ”

Brent crude is up about 10% this year and jumped 50% in 2021. U.S. crude is up nearly 7% in 2022, compared with a 55% gain last year. Both benchmark contracts have fallen sharply in 2020 as the coronavirus pandemic slashed fuel demand.

Investors looking into 2023 will continue to take a cautious approach, wary of rate hikes and a possible recession. The poll of 30 economists and analysts forecast Brent crude would average $89.37 a barrel in 2023, 4.6% lower than forecast in the November poll. U.S. crude oil is expected to average $84.84 a barrel in 2023, also lower than previous forecasts.

Falling oil prices in the second half of 2022 also boosted the dollar as interest rates rose to fight inflation. That makes dollar-denominated commodities such as crude oil more expensive for holders of other currencies. Covid-19 restrictions have dampened hopes of a recovery in demand.

 The dollar fell on Friday in the final session of 2022, notching its best annual performance since 2015, a year dominated by Fed rate hikes and concerns over a sharp slowdown in global growth.

The dollar was on track for a 7.9 percent annual gain against a basket of currencies, its biggest in seven years. But the dollar has pared gains in recent weeks as investors look for signs that the Fed's rate-hiking cycle may be over. The Fed has raised interest rates by a cumulative 425 basis points since March in an attempt to rein in rising inflation. The U.S. dollar index fell about 0.433% to 103.530 on Friday, with liquidity reduced due to the holiday.

The euro rose 0.34% to $1.0697 on Friday and was set to fall 5.9% in 2022, following a 7% loss last year. Weak growth in the euro zone, the war in Ukraine and a hawkish Federal Reserve have weighed on the single currency this year.

USD/JPY fell about 1.63% to 130.860. The Bank of Japan's ultra-dovish stance has pushed the dollar to 13.7 percent against the yen this year, with the yen on track for its worst annual performance since 2013. The Swiss franc was steady at 0.923 franc per dollar. The Swiss National Bank said on Friday it would sell 739 million Swiss francs ($799.35 million) worth of foreign exchange in the third quarter of 2022, a sign that its focus has shifted from containing the franc's appreciation to fighting inflation.

OnePro Special Analyst

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