Tesla in the downward pull
Rising yields weigh on US tech stocks
12/27/2022 11:04 p.m
After the further relaxation of the corona virus in China, Wall Street is speculating that the Fed will continue to raise interest rates. Bond market yields are rising, while interest-sensitive tech stocks are suffering. In Tesla’s wake, other electric car manufacturers are also going downhill.
Losses in the technology sector hit Wall Street. Above all, concerns about the production of the US electric car manufacturer Tesla in Shanghai made up for the enthusiasm after the recent easing of quarantine in China. Of the Dow Jones Index the standard values closed 0.1 percent higher on Tuesday at 33,241 points. The tech-heavy one Nasdaq on the other hand, fell 1.4 percent to 10,353 points. The broad one S&P 500 lost 0.4 percent to 3829 points.
At the Tesla plant in Shanghai, the assembly lines are expected to stand still for the most part in December and January. there was a reason for it Tesla not on. At the end of 2021 and 2022, the electric car manufacturer did not take any lengthy breaks in production. Demand for Tesla cars in China, the world’s largest automobile market, has recently eased. In the first nine months of the year, more than half of all new Tesla cars worldwide came from the car factory with around 20,000 employees. The carmaker’s shares fell by more than eleven percent. The rivals too Rivian and Lucid each lost more than seven percent.
Speculation about the future monetary policy of the US Federal Reserve following the recent easing in China government bonds to. The yield on the 10-year bond jumped to 3.843 percent from 3.747 percent the previous day. Investors are assuming that the world’s second largest economy will soon pick up speed. China is an important trading partner for the US and a stronger economy thanks to rising exports could prompt central banks to make further large interest rate hikes. However, analysts point out that the recovery may still be snagged. “The situation in China is likely to get worse before it can get better. That too makes the latest news a mixed signal,” said Aoifinn Devitt, chief investment strategist at Chicago-based wealth adviser Moneta.
High bond yields hurt technology stocks. The papers from Apple, Amazon and the graphics card manufacturer Nvidia lost up to 7.1 percent. According to experts, rising inflation and higher interest rates will devalue the future profits of these high-growth companies. At the same time, US-listed Chinese Internet stocks rose as pinduoduo and JD.Com by 1.4 and 4.2 percent respectively.
The hope of one Tourist wave from China also boosted US casino operators. The papers from Las Vegas Sands, Wynn Resorts and Melco Resorts & Entertainment jumped by up to 8.1 percent. Gambling is banned in the People’s Republic with a few exceptions, which is what drives Chinese casino fans to the USA.
Weather-related flight cancellations and delays on the Christmas weekend Southwest Airlines to. The shares of the US airline fell almost six percent. Of the more than 3,800 US airline flights canceled Monday, 2,800 were attributable to Southwest. This affected almost 70 percent of all the airline’s flights scheduled for that day.