MarketBeat: Week in Review 12/19 – 12/23

Key Points

• Markets are closing the week flat as hopes of a Santa Claus rally appear to be fading.
• A mixed PCE report reminds investors that inflation will continue to jolt markets in the new year.
• S. markets will be closed on Monday to observe the Christmas holiday.
• Here are some of the top stories our analysts were covering this week.

Markets are closing this shortened trading week flat to lower as the latest reading of the personal consumption expenditures (PCE) index is souring investors on the idea of a Santa Claus rally. Sticky inflation has many of us feeling like the Grinch this holiday season. A major winter storm is causing many individuals to cancel or reconfigure travel plans.

It’s also making some investors concerned about retail sales that are already forecast to be weaker than hoped. All of this bad news is enough to have investors say Bah Humbug! But you’ll have a long weekend to get back your holiday cheer. U.S. markets are closed on Monday in observance of the Christmas holiday.

We at MarketBeat wish you and your families a happy holiday season. As you get some much-deserved rest next week, you can count on us to keep on top of what’s moving the markets. Here are some of the top stories our analysts were covering this week.

Articles by Jea Yu

Jea Yu gave investors insight on one stock that has outperformed the market in 2022 and should continue to do so; one that underperformed but is perhaps being overlooked, and one that is down for the year and likely has further to fall. As Yu writes, Kellogg Company NYSE: K stock is up 12% in a year where the S&P 500 is down 20%.

And with the company about to break out into separate business units, 2023 is shaping up as another good year for investors. Chewy, Inc. NYSE: CHWY is down more than the S&P 500 this year. However, Yu points out that the company has increased its guidance and fits into a niche that should continue to do well even as consumers cut back on discretionary purchases. On the other hand, Yu writes about AMC Entertainment Holdings, Inc. NYSE: AMC which is down 84% for the year and in the penny stock range. But as Yu points out, the best hope for investors maybe if the rumors that Amazon.com, Inc. NASDAQ: AMZN will acquire the company turn out to be true.

Articles by Thomas Hughes

Like most industries, the financial industry loves its acronyms. Investors? Maybe not so much. If acronyms like PCE, CPI, PPI, FOMC make your head explode, Thomas Hughes has you covered. He breaks down what the Personal Consumption Expenditure (PCE) index reading means for investors as we head into 2023 (spoiler alert, things could get worse). If you haven’t abandoned hope for stocks, Hughes writes that Nike, Inc. NYSE: NKE may be one to consider.

Maybe you or someone you love will get a gift from the retailer this holiday season. That wouldn’t be surprising as the company just posted a strong quarter that pushed the stock over 11% higher this week.

Another area for investors to consider could be the recreational vehicle (RV) sector. Many of the big names in this sector got hit hard in 2022 as demand fell from pandemic levels. But Hughes believes the sell-off is more than priced in for some of these top names.

Articles by Chris Markoch

With the bears firmly in control of the market, now is a time to look for oversold stocks. This week, Chris Markoch gave investors five beaten-down stocks that have a compelling case for growth in 2023. The electric vehicle (EV) sector has been sold off sharply in 2022 but continues to grab headlines.

This week Markoch wrote about more positive news coming from Mullen Automotive, Inc. NASDAQ: MULN as it shipped its first urban commercial delivery vehicles, the I-GO™ to Europe. But investors will have to consider the likelihood of a reverse stock split in the company’s future. 

Markoch was also urging caution on Lucid Group, Inc. NASDAQ: LCID. The company has reached the production stage but requires an infusion of cash while internal e-mails show customers are beginning to cancel orders.

Articles by Kate Stalter                                                          

Government policy and spending take a long time to work into the economy. That’s a good lesson for investors to take to heart, specifically when we can be conditioned to have short-term thinking.

Specifically, Kate Stalter wrote about two sectors that appear just now to be starting to benefit from the infrastructure spending bill passed in Congress. Heavy equipment companies such as Caterpillar Inc. NYSE: CAT and Deere & Company NYSE: DE have been beating the S&P all year, and that growth has kicked into high gear and should carry well into 2023.

Another industry expected to benefit from the bill was the solar sector. Stalter highlights three large-cap solar stocks and explains why they are just beginning to heat up. And it wouldn’t be a week without Tesla, Inc. NASDAQ: TSLA CEO Elon Musk making news. But for once, it appears he’s taking action that may delight TSLA shareholders. Specifically, Musk appears ready to hand over the reins at Twitter which is likely to mean he’ll re-focus on Tesla.