Midday Look- 1/17/23


The stock market is trading down today. The major indices sport losses ranging from 0.3% to 1.2% with just about everything participating in a broad retreat. Weak megacaps and semiconductor stocks are having an outsized impact on the broader market.

NVIDIA (NVDA 556.69, -7.05, -1.3%), Tesla (TSLA 213.64, -6.26, -2.9%), Amazon.com (AMZN 151.18, -1.98, -1.3%), and Alphabet (GOOG 142.20, -1.88, -1.3%) are all down more than 1.0%. Tesla is sinking nearly 3.0% after news that the company lowered Model Y prices in Germany, according to Reuters, and after its price target was cut to $223 from $250 at Wells Fargo.

Separately, the PHLX Semiconductor Index is trading down 1.8% with every component showing losses.

Relatively weak mega-cap and semiconductor stocks have been pressured by another increase in market rates. The 2-yr note yield is up 13 basis points to 4.35% and the 10-yr note yield is up two basis points to 4.09%.

The price action in the Treasury market partially reacts to this morning’s release of the December retail sales report, which did not go the market’s way about optimistic rate cut expectations. That is to say, consumer spending was slightly better than expected in December and not likely to persuade the Fed to cut rates as much, or as early, as the market hopes.

See you tonight.

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