ECONOMIC SILUET: Watch these energy stocks, names beloved by hedge funds and Tesla in trading tomorow

THU, DEC 08, 2022

The goal of this newsletter is to get you ahead of the next day of investing and trading. It's your first look at tomorrow and last look at today powered by the team of people who direct CNBC TV's stock market coverage.

Tomorrow's Top CNBC Stories Tonight

Dan Loeb's Third Point boosts Bath & Body Works stake

Bath & Body Works is higher after hours, following a disclosure from Dan Loeb's Third Point that it has upped its stake in the company from roughly 3.6% to over 6%. The hedge fund believes "certain decisions" made by the company's board, especially surrounding executive compensation, raise questions about its governance. The stock has underperformed this year, down nearly 40%. For comparison, the SPDR S&P Retail ETF (XRT) is down roughly 27% year-to-date.

DocuSign shares pop in after-hours trading

DocuSign rising in the extended session after decent-sized beats on the top and bottom lines. However, its Q4 revenue outlook was very slightly below estimates. Like many other cloud and enterprise stocks, DOCU has been hard-hit in 2022, down roughly 71%. The WisdomTree Cloud Computing ETF (WCLD) is down just over 50% this year.

Chinese tech stocks propel the Nasdaq 100

As China loosens more Covid restrictions, stocks with exposure there continue to rebound. Tech names like Baidu and Pinduoduo led the Nasdaq 100, up 5% and 6%, respectively. Bilibili gained 8% Thursday and is up roughly 18% this week. Over the past month, Bilibili has gained 102%. On the Macao casino side of things, Wynn and Las Vegas Sands both finished in positive territory, with LVS hitting its highest level since July 2021. Melco Resorts gained 12% Thursday. It's up almost 30% this week and 120% in the past three months.

An ugly week for the energy sector

Energy stocks finished the day lower, with the Energy Select Sector SPDR ETF (XLE) posting its sixth-straight decline and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) heading for its worst week since September. Every constituent of the energy sector is on track for sharp weekly declines. EQT, EOG Resources, and Halliburton are all off by 10% or more this week. Those moves come as oil trades near its lowest levels of 2022.

Six days of declines for Bank of America

Bank of America finished lower again Thursday, though the banks and financials overall were mixed. BAC has fallen for six-straight sessions and is tracking for its worst week since June 2020. According to FactSet, 59% of the analysts covering the stock have buy or overweight ratings, while 41% have hold ratings. It finished Thursday around $9 lower than its average analyst price target.

Ethan Kraft | CNBC Breaking News and Markets Producer
@ethan_kraft

Time to sell energy stocks?

Widely followed JPMorgan strategist Marko Kolanovic is calling for investors to make "a tactical trade to sell energy stocks."
CNBC has been reporting on the wide divergence between oil the commodity, and oil and energy stocks.
Kolanovic does believe energy stocks should be bought again after what he believes is an incoming drop, and he's calling for investors to buy again after a 20% to 30% decline.
Year to date, the Energy Select Sector SPDR ETF (XLE) is up 52%. West Texas Intermediate crude is down more than 4% for the year and Brent crude is down about 1.65% for the year.
In the last two months, the XLE is up 3.4%, while WTI and Brent are both down by about 22%.
A one-month chart has the XLE down 9%, while WTI and Brent are both down by 19%.
Patti Domm for CNBC.com is going to have a lot more on this online Friday.

Mutual funds and hedge funds love these stocks

According to Goldman Sachs researchers, there are six stocks that are popular for both strategies right now.
On the list: Constellation Energy, Workday, Uber, Wells Fargo, Mastercard and Danaher.
Constellation is 6.5% from the 52-week high.
Mastercard is 12% from the 52-week high.
Danaher is 17% from the 52-week high.
Wells Fargo is 29% from the 52-week high.
Workday is 41% from the 52-week high.
Uber is 42% from the 52-week high.
Read more about these findings here.

Another day, another big defense contract

Last evening, news broke that the Pentagon was awarding a cloud computing contract to Microsoft, Oracle, Alphabet and Amazon.
On Thursday, Lockheed Martin won a $2.2 billion contract for logistics support in a variety of areas for the U.S. military.
Many of the defense stocks are within 5% of 52-week highs including Leidos, Lockheed Martin, Northrop Grumman, the iShares US Aerospace & Defense ETF (ITA), General Dynamics and BWX Technologies.
Lockheed is up 36% in 2022, among the top-performing defense stocks.

Tesla bulls and bears speak on CNBC

If you missed it, Gene Munster of Loup Ventures, who has a great track record in this area, says Tesla is close to a good entry point.
He argues deliveries will be solid and that they'll be competitive against any EV peer.
That said, the stock is 57% from the 52-week high set back in January. Tesla is down about 11% in four days.
Fast Money's Guy Adami doesn't agree, by the way. He thinks it is going lower.
There is more to come Friday on this, one of the most popular stocks for retail investors and traders.

Nikola in the spotlight

The new CEO of the electric truck maker will speak with Phil LeBeau on "Squawk Box" Friday.
Nikola is down 80% from the 52-week high. It's off by another 16.5% in four days.

Brighter spots among beat-up REITs?

Blackstone's Jon Gray defended the company and told everyone this isn't nearly as bad as it's being made out to be in an exclusive interview with David Faber in the 9 a.m. ET hour of "Squawk on the Street" Thursday.
On Friday, real estate reporter Diana Olick picks up the story with a look at perhaps brighter spots and long-term opportunity.
Office real estate investment trusts have been hit really hard. Brookfield Property is down 6.5% in four days. Boston Properties dropped 6.3% in four days, and Vornado fell 12% in the same period.
Other areas with significant declines include health REITs. Brookdale Senior Living is down 10% in four days. In the same time period, Medical Properties Trust is off by 7.7% and Welltower slipped 7.6%.