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Daily summary: Big tech drags down S&P 500 and Nasdaq

20:02 13 January 2022
  • European indices little changed
  • Tech sector weigh on Wall Street 
  • US weekly claims rose unexpectedly, PPI soar 9.7% in December
  • TESLA (TSLA.US) stock under pressure due potential delay of its Cybertruck production

European indexes finished today's session mostly flat, taking a breath after two-day rally due to poor performance of healthcare and personal goods sectors. Major UK retailer Marks & Spencer stock fell 8%, as the company guided for full-year adjusted pretax earnings of about £500 million, the same outlook as its November estimate. The Swiss construction company Geberit stock fell over 4.0% after the company said that increased uncertainty made it impossible to provide an outlook for 2022. On the flip side, the automotive sector was the best performer for the day.

Major Wall Street indices erased early gains and are trading mostly lower dragged by the tech sector. The S&P 500 fell 0.7% and  Nasdaq sinked1.6% while the Dow Jones is trading marginally higher. The annual producer inflation rate rose to 9.7% from a record 9.6% in November, slightly below analysts’ estimates of 9.8% with gasoline costs dropped sharply compared to November. Elsewhere initial jobless claims in the US increased to 230k in the week ending January 8 from 207k in the previous week and above analysts’ estimates of 200k. Lael Brainard appeared before the Senate Committee for confirmation hearings for the Fed Vice Chair position. She said that fighting inflation was the most important task of the Fed, which of course was a vote of support in favor of tightening monetary policy. Brainard is generally considered as dovish when it comes to monetary policy, but her testimony suggests she is a supporter of a more aggressive approach to tackling inflation. Obviously, this is not positive news for the stock market (especially tech sector) as it brings normalization of the Fed's policy closer. On the corporate front, Tesla stock dropped more than 4.0% amid potential news regarding a delay in production of its highly anticipated Cybertruck model.

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Downbeat moods prevail today in most commodity markets. Precious metals prices fell despite weaker dollar and lower US 10-year Treasury which dropped to 1.72%. Gold is testing $1,820.00 level while silver pulled back to support at $ 23.00. WTI oil fell 1% and tested $82.20 level while Brent is trading around $84.50.

 Major cryptocurrencies took a hit today. Bitcoin price fell to $42 700 level while Ethereum bounced off the resistance at $3400 and is currently testing $3270 handle. 

EURUSD managed to break above the resistance at 1.1430, which is marked with the upper limit of the 1:1 structure. However the upward movement lost steam around the EMA100, so it is too early to assume that sentiment shifted to bullish one. Source: xStation5

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