A look at the day ahead in U.S. and global markets from Mike Dolan.

Amid all the macro policy excitement this month, the relentless slide of electric auto giant Tesla’s stock has been withering – with its boss Elon Musk’s controversial parallel stewardship of new toy Twitter the latest big concern.

Billionaire Musk said on Tuesday he will step down as chief executive of Twitter once he finds a replacement – but will still run some key divisions of the social media platform.

That may offer some crumb of comfort for long-suffering Tesla investors. The EV firm’s ailing stock popped up about 2% from two-year lows in pre-market trading on the news.

Musk’s $44 billion takeover of Twitter in October has been marked by chaos and controversy, with many investors questioning whether he is too distracted to also properly run Tesla – in which he is personally involved in production and engineering.

But it may take more than love and attention from Musk to revive Tesla – with rivals’ catchup, China production problems and looming recession more generally all big weights on what many assumed to be an overvalued pandemic boom.

Its 60% stock slide this year – almost twice the year’s losses in the ailing Nasdaq tech index and three times that of the S&P500 – tells its own story.

Although it’s still a whopping five times pre-pandemic levels, Tesla stock has reversed 40% over two years and hit its lowest levels since November 2020 on Tuesday after a swingeing 8% one-day drop and as at least three brokerages cut price targets.

Broader world markets headed into the holiday-strewn year-end in only a slightly less gloomy mood on Wednesday.

Asian stocks were in the red once again amid a mix of China’s worrying new COVID surges and reverberations from the Bank of Japan’s shock decision on Tuesday to raise its cap on government bond yields.

European bourses and U.S. stock futures were higher however.

FedEx shares rose 3.7% post-bell on Tuesday after Memphis-based global delivery company reported a bigger fiscal second-quarter profit than Wall Street expected – a rare positive pulse from a firm sometimes seen as a bellwether of world trade.

Those soundings partly offset what has been a relentless week of dour U.S. economic news. The latest was U.S. single-family homebuilding tumbling to a 2-1/2 year low in November and permits for future construction plunging as higher mortgage rates continued to depress the housing market.

U.S. Treasury yields slipped back from Japan-inspired three-week highs as a result, although recession warnings contained in the 2-to-10 year yield curve inversion did ease to their least negative in more than a month.

With one eye on weekend budget wrangling in Washington, December consumer sentiment readings will be in focus on Wednesday along with a 20-year bond auction.

The dollar was more mixed generally – higher against the European currencies but showing little sign of a bounce against the yen after the Japanese currency soared more than 4% on Tuesday’s Bank of Japan surprise.

Key developments that may provide direction to U.S. markets later on Wednesday:

* U.S. Dec consumer confidence, Nov existing home sales, Q3 current account

* Canada Nov consumer price inflation

* U.S. Treasury auctions 20-year bonds

* U.S. corporate earnings: Micron Technology, Carnival, Cintas

(By Mike Dolan, editing by Emelia Sithole-Matarise mike.dolan@thomsonreuters.com. Twitter: @reutersMikeD)

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