A bear market awaits tech stocks, with Tesla at the center, if this selloff continues, strategist warns

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Stock futures are pointing to some losses in the last full trading day ahead of the start of the Thanksgiving feast – albeit with the prospect of thinning. Investors will also have to go through a mountain of figures on Wednesday.

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Recent stock losses have raised more doubts about the Santa rally for some. Track the 30 Year Treasury Yield TMUBMUSD30Y,
2.016%,
Advices Jeffrey Haley, senior market analyst at OANDA.

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“Unless long US yields begin to reverse their recent gains, and the authors believe that this is not a given, we should not expect the end of US dollar strength, and neither should we Equity markets for the remainder should be excited about this month and possibly in Christmas,” he told in a note to clients.

As investors know, rising returns is painful for tech stocks. Peter Garnery, head of equities at Saxo Bank, explained in a note to clients, “If interest rates rise faster than future growth expectations, the net effect is negative at present value and greater for growth stocks because of their duration.” is more.” Tuesday for customers.

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Gary offers us call of the day As he uses a bit of recent history to make a grim forecast about what the renewed rise in yields could do for tech stocks.

“We have seen downside beta (high sensitivity) across all of our growth equity baskets. [on Monday] The gaming basket is down 2.3% and the worst-performing e-commerce and crypto and blockchain baskets are down 4.2% and 5.1%, respectively. This tells you a lot about sensitivity and given the fall in technology stocks in March, we could easily see a 15% to 20% decline in technology stocks,” he said. An asset is typically defined as entering a bear market when it falls by at least 20% from its peak.

Gary said the US 10-year yield hit a high for TMUBMUSD10Y earlier this year,
1.669%
– 52-week high of 1.749% was reached on March 31 – “breakouts and a new trading environment” are critical.

And a popular stock could be at its center, he said. “With all options activity at Tesla dwarfing combined options activity across the FTSE 100 components, we believe Tesla will be at the center of the next risk-off step in technology,” he said.

Businesshala / Saxo Bank

Tesla shares 57% year-over-year, even as CEO Elon Musk continues to sell. He recently dumped another 934,000 shares for about $1.05 billion, bringing his total since early November to $9.85 billion.

Kathy Wood’s ARK sells Tesla to buy Zoom after earnings

Gary is advising investors to “improve the balance between growth and value stocks” to offset any potential technical losses.

A safe and happy thank you, and this column will be back on Friday.

buzz

Traditional day-before-Thanksgiving data dumps, weekly initial jobless claims, second estimate of Q3 GDP, October personal income and personal spending, new-home sales, and early October durable goods and core capital goods order data are all ahead. .

Also, the minutes of the latest Federal Reserve meeting are coming later. Overnight the Reserve Bank of New Zealand increased its cash rate.

Deere Share Dee,
+0.03%
Construction equipment continues to grow after the company reported higher-than-expected profits and sales.

The personal-computer boom is clearly still going strong, with the HP HPQ
+0.81%
and del del,
-0.83%
Shares rose after each reported a strong selloff.

On the retail front, retailer Gap GPS,
-1.80%
Guidance missed due to “critical” supply-chain issues, while Nordstrom JWN,
-1.21%
Reported mixed results. Both shares are down.

Longveron LGVN,
-38.94%,
A little-known biopharma, the mini-squeeze is garnering attention from the crowd, but they’ve seen this rodeo before and are wary.

France’s fifth COVID-19 wave is spreading “lightning fast”, warn officials in one of many countries in Europe struggling to get the outbreak under control. For the second Thanksgiving since the pandemic began, disease experts are taking a closer look at hot spots in the chilly Upper Midwest. And the US will soon require all border crossings to be vaccinated.

Deutsche Bank, Havar Analytics, Johns Hopkins University. Note: Refers to confirmed cases, which may be affected by different levels of testing in each country.

Sweden elected its first female prime minister, Magdalena Andersen.

Market

stock futures ES00,
-0.31%

YM00,
-0.36%

NQ 00,
-0.38%
are soft, with bond yields TMUBMUSD10Y,
1.669%
Highs and Dollar hovering over DXY,
+0.33%
Emerging. oil prices CL00,
-0.29%

NQ 00,
-0.38%
Strategic crude stockpiles in the US continued to rise after tapping on Tuesday, as analysts see demand in the driver’s seat. Gold GC00,
+0.12%
is also more. and the Turkish Lira USDTRY,
-6.68%
It is regaining some ground after a brutal 10% decline against the dollar this week.

random reads

NASA sends the spacecraft into orbit to strike an asteroid, “Armageddon” style.

An Albert Einstein Manuscript, great mind at work, sold at auction for $11 million.

Apart from the discussion of inflation, there just not enough alcohol For Thanksgiving this year.

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Want more for the day to come? sign up for The Baron’s Daily, this morning’s briefing for investors, including exclusive commentary from Barron’s and Businesshala writers.

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