Tesla, one of the worst shares of 2022, jumped on Thursday, leading a broader stock market growth that is likely to end a not-so-good and very bad year on a positive note.
Markets grow on the strongest consumer confidence data since April
Tesla rose by 7.9% to $121.57, gaining 3.3% on Wednesday and largely offsetting the 11.5% Tuesday loss caused by supply and demand disruptions in China associated with Covid.
The American car manufacturer spurred a 1.7% jump for the S&P 500 and a 2.6% jump for the Nasdaq Technology – the best day result of each index in December – while the Dow Jones Industrial Index, which does not include the Tesla, rose by 1.1%, or 350 points, at the beginning of trading.
The wider growth was mainly a reaction to the publication of the latest employment data from the Ministry of Labor, according to which the number of initial unemployment claims increased by 4% last week to 225,000, as the market hopes for any signs of a softer labor market, which might force the Fed to ease interest rate hikes.
Bond markets also rose, with yields on 10-year US Treasury bonds dropping by six basis points to 3.83%.
Tesla is still down 69.6% year on year and ranks 499th in the S&P rating at the close of the medium. Dow, S&P and Nasdaq are at their lowest annual returns since 2008.
The brutal year of 2022 in the market followed one of the most prosperous periods for the stock, when Dow rose almost 90% from a fall in March 2020 to December last year. However, the rally was accompanied by the highest inflation in four decades, forcing the Fed to raise interest rates in an attempt to slow economic growth. Like Tesla, other historically high-growth stocks have not surpassed the market either: Amazon, Netflix, and Meta have fallen by 50% or more since the beginning of the year.
More than $800 billion. That’s how much Tesla’s market capitalization has lost from a November 2021 high of $1.2 trillion to a valuation of $381 billion on Thursday.
“The bar is low” for investors in 2023 amid expectations of a recession and higher interest rates from central banks around the world, OANDA analyst Craig Erlam wrote in a note Thursday.