Stock Market 2023: What To Do After ‘Stay Away’ Year; Tesla, Nio, BYD Deliveries

Dow Jones futures will open on Monday evening, along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) and China EV makers such as Nio, Li Auto and BYD will report year-end and 2022 deliveries over the New Year’s holiday weekend.

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Investors will be looking for a brighter stock market in 2023 after a “stay away” year, especially for growth. The Dow, S&P 500 and Nasdaq all had their biggest annual declines in 14 years. A stock market rally attempt is underway, but has a long way to go to prove itself.

The Dow Jones dipped below its 50-day moving average on Friday. The S&P 500 and especially the Nasdaq have some distance to go to their 50-day lines, with several other key resistance areas along the way.

Celsius Holdings (CELH), Deere (DE), BioMarin Pharmaceutical (BMRN), Exxon Mobil (XOM) and Medpace (MEDP) are five stocks near buy points. It’s a diverse list, reflecting possible areas of market leadership in the new year.

DE stock and Medpace are on IBD Leaderboard. Celsius stock, MEDP stock are on the IBD 50. Deere and BMRN stock are on the IBD Big Cap 20.

Deere was Friday’s IBD Stock Of The Day.

But whether these stocks work or not depends on the market trending higher. Right now it is not. Investors should remain very cautious.

The video embedded in the article discussed the recent market action in depth and discussed what investors should be doing as stock market 2023 gets going. The video also analyzed CELH stock, Deere and BioMarin.

China’s Economy Struggling

China’s economic activity is tumbling as the abrupt end of strict Covid rules spur massive waves of infections. The official manufacturing index fell 1 point in December in 47, the government said Saturday.  The nonmanufacturing PMI, which covers service-sector and construction activity, dived 6.1 points to 41.6. Both are the lowest since February 2020, when Covid-19 first hit the country. Readings below 50 signal contraction.

China EV Deliveries

Nio (NIO), Li Auto (LI) and XPeng (XPEV) are on tap to report December, fourth quarter and full year EV deliveries on Sunday, Jan. 1. Li Auto on Friday said December deliveries of its hybrid SUVs would top 20,000, crushing November’s record 15,034. Nio recently lowered its Q4 delivery guidance, citing Covid-related issues. The guidance implied December deliveries of 14,263-15,263 EVs, which would slightly top November’s record 14,178. Xpeng should see deliveries rise after several month-to-month declines, but its model lineup is struggling.

BYD will likely report its December sales on Jan. 3, before the U.S. market open Tuesday. The EV and battery giant recently stated that Covid infections among workers was reducing production by at least 2,000 vehicles per day. Full-year deliveries of all-electric BEVs and plug-in hybrids should be around 1.88 million, BYD recently said. That implies December deliveries around 247,000-250,000, which would still be a record.

Nio stock, Li Auto, Xpeng and BYD all had a tough 2022, like other EV makers and growth stocks generally. They all bottomed in October or early November, but have pulled back in recent weeks.

Tesla Vs. BYD: Which EV Giant Is The Better Buy?

Tesla EV Deliveries

Tesla is expected to release fourth-quarter EV production and delivery figures on Jan. 2. Analysts expect Q4 Tesla deliveries of 418,000, though the consensus has been slipping in recent days amid further China weakness. Tesla offered big year-end incentives, especially in China and the U.S., to boost sales. That didn’t provide a huge boost in China, but did appear to clear inventory in the U.S.

In 2023, Tesla will benefit from new U.S. tax credits of up to $7,500, though the year-end incentives of $7,500 for the Model 3 or Model Y — with Model S and X vehicles added Dec. 30 — may have tapped some of that demand. A $55,000 price cap on most Model Y vehicles could limit Tesla’s EV credit boost.

Meanwhile, China is ending EV subsidies. Along with a massive Covid wave, that could further chill sales for EV makers there, including Tesla. Tesla may need significant new price cuts in China, where competition continues to heat up from BYD, Nio, Li Auto, Xpeng and others.

Over in Europe, several countries are cutting or ending EV subsidies, providing another headwind for Tesla as backlogs there fade.

Tesla stock plunged 65% in 2022, its worst annual decline by far. Shares crashed 37% in December to their lowest levels since September 2022. The EV giant did rebound from midweek bear market lows to end the week roughly flat. TSLA stock volume has been very high in the past several weeks.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Monday, along with S&P 500 futures and Nasdaq 100 futures.

U.S. stock and bond markets will be closed on Monday, Jan. 2, in observance of New Year’s.

On Tuesday, investors will get the December ISM manufacturing index. On Friday, the December jobs report looms large as the Federal Reserve looks for signs of a weakening job…