MarketBeat: Week in Review 12/12 - 12/16

Key Points

• A triple-witching day brought a volatile end to an already volatile trading week.
• The markets continue to digest the severity of a recession.
• Next week’s PCE index reading may be the last hope for a Santa Claus rally.
• Learn about the top stories our analysts covered this week.

Buckle up! December 16 was a triple-witching day and that means it could be a rough end to your trading week. The markets will digest the expiration of stock options, stock index futures and stock index options contracts on the same day. Today is also the day that several indexes, including the S&P 500, will rebalance.

The story that continues to hang over the market is the likelihood of a recession in 2023. The Federal Reserve raised interest rates by 50 basis points and are guiding to more rate hikes in 2023.

Does this mean that Santa Claus won’t come to Wall Street this week? Not necessarily. The last hope may be the PCE price index which comes out on December 23. If that number confirms that inflation is moderating, it may be enough to deliver a rally to close out the year.

On the other hand, volumes will be down as many traders step away for the holidays. That just means it’s time to prepare for what’s next. The MarketBeat team is here to help position you for success. Here are some of the top stories our analysts covered this week.

Articles by Jea Yu

As part of our explainer series, Jea Yu helps investors understand the future direction of the S&P 500. The index is down over 17% for the year. Yu points out that many of the same factors that caused that decline will continue to be headwinds for the index in 2023. Chinese stocks have been among the biggest decliners, and Bilibili Inc. NASDAQ: BILI is no exception. BILI stock is down over 50% in 2022 but has rallied over 40% in the last month. Yu provides an overview of how the platform is similar and different from YouTube and how that may affect your investment decision. Yu also confirmed that the recent performance of Dave & Buster’s Entertainment Inc. NASDAQ: PLAY shows consumers are still willing to pay for experiences. As Yu points out, its recent acquisition of Main Event Entertainment may help the company build a bridge to a younger generation.

Articles by Thomas Hughes

Even though we’ve barely wrapped up the third-quarter earnings season, it’s not too early to forecast what to expect from next quarter’s earnings season, which starts in January. Thomas Hughes offers investors an overview of the factors that will put pressure on earnings and impact the direction of the markets. Despite the broader market behaving like the Grinch this holiday season, one company has provided holiday cheer for investors: Mullen Automotive Inc. NASDAQ: MULN. The EV maker made news on two separate occasions this week by signing its first dealer partner and announcing a large purchase order from that partner for 6,000 of the company’s Class-1 cargo vans. If investing in the EV sector is still a bit too risky for your taste, Hughes also highlights two blue-chip health companies (both Dividend Kings) heavily bought by institutional investors.

Articles by Sam Quirke

After two years of riding a bull market, investors have seen the other side of a cyclical semiconductor market in 2022. As Sam Quirke writes, the low may be in. That makes it time to consider taking a position in chip stocks. Quirke looked at Nvidia Corporation NASDAQ: NVDA and Advanced Micro Devices Inc. NASDAQ: AMD and offered his opinion on which may be the better buy in 2023.

Articles by Chris Markoch

If you have some speculative cash to put to work, you may want to look at the biotech sector. As the COVID-19 pandemic showed, all it takes is a little positive news to send these stocks higher. It all comes down to the pipeline. Chris Markoch offers three small-cap biotech stocks that offer investors reasons to test this sector’s risk/reward proposition.

Articles by Kate Stalter                                                          

Weak retail numbers were a catalyst for the market’s decline this week. As Kate Stalter writes, Lululemon Athletica Inc. NASDAQ: LULU may have set the stage. The athleisure retailer reported higher-than-expected inventory levels. That soured what was otherwise a strong earnings report that beat on the top and bottom lines and were higher on a year-over-year basis. Stalter also looked at the charts and pointed out a key technical signal that may be one reason, along with continued revenue and earnings growth, that Tractor Supply Company NASDAQ: TSCO may be ready for a sharp move higher. For investors willing to take a flyer on small-cap stocks, Stalter looked at the recent announcement by Harpoon Therapeutics Inc. NASDAQ: HARP. The company announced positive results in its ongoing Stage 1 clinical trial for its lead candidate. The sharp spike met an equally sharp sell-off — a reminder that many of these stocks remain too volatile for many investors.

Articles by MarketBeat Staff

Many analysts say that now is the time to buy dividend stocks. We agree, and this week the MarketBeat staff gave you three companies that continue to increase their dividends, with further earnings growth projected in 2023. These stocks look like solid buys. At a time like this, investors shouldn’t overlook mid-cap stocks. These stocks are on pace to outperform large caps for the second straight year, and our staff offers three mid-cap stocks that may double in 2023. One stock that won't outperform the market is Kohl’s Corporation NYSE: KSS. The company delivered sour earnings in the third quarter and the future outlook is not much brighter as its core consumer remains under pressure. The company also faces headwinds from other e-commerce companies.