Tesla shares rise, but Nike and Ford struggle-Market update

  • Nike shares down after HSBC downgraded the stock on supply chain bottlenecks

  • Ford Motors stock is also down but Tesla has turned green after bouncing off last week’s losses

  • Goldman Sachs expects Tesla stock to outperform in 2022.

US stocks traded lower on Monday, with all the major indexes seeing continued pressure following last week’s tech-led sell-off.

The S&P 500 pared early losses but remained in the red by about 0.14% in early afternoon trading. The S&P 500’s consumer discretionary, technology, and communication services sectors lead the losses.

The Nasdaq Composite, on the other hand, is looking to recoup recent losses after rallying from -2.0% to near +0.1%. Among the top gainers in the index are shares of Moderna Inc., Intel Corp., and Fortinet, which are all more than 3% up.

The Dow Jones Industrial Average is seeing the most losses so far at around 0.45%, although the index has also pared early losses.

Goldman Sachs says Fed could go for four rate hikes

The weakness in the markets comes as investor sentiment cools in anticipation that the US Federal Reserve is set to hike interest rates sooner-than-expected.

It also follows Goldman Sachs’ call on Monday suggesting the US central bank might have to hike interest rates four times over the next twelve months.

Markets update

Treasury yields edged higher again, with the 10-year yield hitting 1.8% to record its highest peak since January 2020. However, the yield has dropped to 1.76% as investor sentiment turns towards risky assets

Oil prices have also dropped slightly from Monday’s highs amid concerns over supply disruptions linked to the unrest in Kazakhstan.

In cryptocurrencies, the chaos in Kazakhstan has contributed to the decline in Bitcoin and other crypto prices. The benchmark cryptocurrency fell below $40,000 in early morning trades before seeing a slight upside to push back above $41,000.

Goldman Sachs signals Tesla as 2022 top pick

In individual stocks, Tesla shares were up 1.35% to $1,040 after bouncing off recent lows. On Friday, Tesla CEO Elon Musk revealed plans to raise the price for its vehicles’ advanced driver assistant software.

But on Monday, Goldman Sachs analyst Mark Delaney outlined Tesla as the top pick for 2022. He cited the electric car maker’s record deliveries, margin growth, and production potential as factors that could see the stock outperform this year. 

The analyst’s new per share target is $1,200, up from a previous target of $1,125. 

According to Future Fund Managing Partner Gary Black, Nasdaq’s upside and a decline in the 10-year yield helped TSLA shares. Tesla shares ended 2021 with yearly gains of more than 50%. 

Nike shares were down 4.4% on Monday afternoon after analysts at HSBC downgraded the stock from buy to hold.

Ford also saw declines of 3% to $23.68, although the shares are still more than 8% up year-to-date. Ford shares ended 2021 +137% to outpace Tesla and industry rivals such as General Motors.

Earnings watch

Key earnings to watch starting Tuesday include those of grocery chain Albertsons; building firm KB Home; financial services company Wells Fargo and investment banking giants JPMorgan and Citigroup.

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