Business

Dow Jones Futures: Market Rally Keeps Sliding, 5 Stocks Near Buy Points, Tesla Earnings Loom

Published

10 months ago

April 15, 2022

Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally suffered further losses last week, with the Nasdaq leading declines as Treasury yields continue to soar.

What’s your game plan for the coming week? Be cautious about new buys, focusing on leading sectors. Earnings season adds further uncertainty, with Tesla (TSLA) headlining a big week of results.

Expedia (EXPE), Cheniere Energy (LNG), Merck (MRK), Edwards Lifesciences (EW) and Check Point Software (CHKP) are five stocks near buy points from relatively strong areas of the market. EXPE stock is part of the latest travel revival. LNG stock is a leader in the still-hot energy sector. Merck stock and Edwards Lifesciences are part of the healthy medical sector. CHKP stock is a leader in the cybersecurity space, one tech pocket that is holding up.

Tesla stock, for its part, is working on a cup-with-handle buy point, but the chart is messy with earnings just one of the many risks in focus.

Cheniere Energy and Tesla stock are on IBD Leaderboard. Tesla also is on the IBD 50. Check Point was the IBD Stock Of The Day.

The video embedded in the article discusses the week’s market action and analyzes EXPE stock, Cheniere Energy and Check Point Software.

Dow Jones Futures Today

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

U.S. stock markets are closed on April 15 for Good Friday. Stock markets in Europe, Australia and Hong Kong are closed Friday and Monday.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally had some big daily and intraday moves in a short week, but the overall trend remains bearish. The Dow Jones Industrial Average sank 0.8% in last week’s stock market trading. The S&P 500 index slumped 2.1%. The Nasdaq composite lost 2.6%. The small-cap Russell 2000 eked out a 0.5% gain.

The 10-year Treasury yield rallied 12 basis points to 2.83%, hitting the highest level since late 2018.

U.S. crude oil futures shot up nearly 9% to $106.95 a barrel last week. The European Union is drawing up plans to ban Russian crude oil, the New York Times reported Thursday, a painful economic step that Germany in particular had resisted. The EU reportedly won’t formally discuss a Russia crude ban until the final round of French presidential voting on April 24. If the EU does go ahead, crude prices could spike higher. The EU is even more reliant on Russian natural gas.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.2% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.8% The iShares Expanded Tech-Software Sector ETF (IGV) sank 2.1%. The VanEck Vectors Semiconductor ETF (SMH) skidded 3.5%, threatening to undercut 2022 lows.

SPDR S&P Metals & Mining ETF (XME) soared 7.3% last week to a fresh high. The Global X U.S. Infrastructure Development ETF (PAVE) advanced 1.4%. U.S. Global Jets ETF (JETS) ascended 8%. SPDR S&P Homebuilders ETF (XHB) closed just below break-even. The Energy Select SPDR ETF (XLE) edged up 0.4% and the Financial Select SPDR ETF (XLF) retreated 2.6%. The Health Care Select Sector SPDR Fund (XLV) lost 2.9%, but from all-time highs.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) both fell 2.7% last week. Tesla stock remains the No. 1 holding across Ark Invest’s holdings.

Five Best Chinese Stocks To Watch Now

Stocks To Watch

EXPE stock popped 6.5% to 191.55 last week, reclaiming its 50-day line. Expedia stock has a 204.08 cup-with-handle buy point, according to MarketSmith analysis. Investors could use a downward-sloping trendline from the top of the base to find an early entry around 195.

Expedia stock has a triple-digit price-to-earnings ratio. Highly valued P-E stocks haven’t done well in recent months. However, with Expedia earnings expected to skyrocket 364% it could be an exception.

Expedia stock shot up on Wednesday-Thursday along with many other travel stocks on Delta Air Lines (DAL) earnings and guidance on Wednesday, with the carrier saying travelers haven’t been phased by higher fares. Hilton Worldwide (HLT) and Marriott International (MAR) cleared official buy points Thursday, at least intraday, after crossing early entries on Wednesday.

The relative strength line for EXPE stock is well off consolidation highs, a potential concern. The RS lines for Marriott and Hilton are at or near highs. Relative strength lines, the blue lines in the charts provided, track a stock’s performance vs. the S&P 500 index.

EV ‘Freak-Out Moment’ Looms Over Lithium, Rare Earths

LNG Stock

LNG stock retreated 3.2% to 139.53 last week, but rebounded from its 21-day moving average and 10-week line. This is the second or possibly third 10-week line test for Cheniere Energy stock, but investors could use it to start a small position or add a few more shares. LNG stock could be in the process of forming a new base. The RS line is just below highs.

Cheniere Energy is expected to deliver massive profits in 2022 as demand for liquefied natural gas skyrockets around the world, especially Europe. The Russia-Ukraine crisis is spurring further interest, though a Russian gas embargo is not on the table for now.

Merck Stock

Merck stock dipped 0.9% to 86.91 last week, pausing after rising steadily up the right side of a cup base. MRK stock has a 91.50 buy point for now, but could have a handle on a daily chart after Monday, giving it an 89.58 entry. Technically, Merck stock now has a handle on a weekly chart, but it’s barely perceptible. Ideally, Merck stock would form a longer, slightly deeper handle to shake out weak holders. But the RS line is already at a 52-week high.

EW Stock

Edwards Lifesciences stock sank 3.15% to 120.02 last week. On a daily chart, EW stock has a cup base with a 131.83 buy point. After Monday, it could have a handle with a 125.21 official buy point. That handle is already there on a weekly chart. The RS line for EW stock is already at a record high as well.

Medical device and products makers should see higher demand as electric procedures return with Covid waning.

CHKP Stock

Check Point Software stock lost 4 cents to 142.78 last week, trading relatively tightly over the past few weeks. CHKP stock is in a consolidation that could viewed as a flat or shallow cup-with-handle base. The cup-with-handle buy point is 145.64. A downward-sloping trendline from the March peak would offer a slightly lower entry.

The current base followed a long consolidation, arguably going back to the start of 2021.

Check Point earnings growth is slim, and isn’t expected to get much better. But CHKP stock has a low P-E ratio. Palo Alto Networks (PANW), a faster-growing, higher P-E cybersecurity play, is also looking good.

Tesla Stock

Tesla stock fell nearly 4% last week to 985, after losing more than 5% in the prior week. The upside is that the handle now has some depth, presumably shaking out some weak holders after TSLA stock’s powerful late March run. But the chart is deep and messy. A longer handle, with some tighter action, would let the major averages continue to catch up.

Tesla earnings are due on Wednesday night. Investors can expect strong year-over-year growth, but will probably be looking ahead to Q2 and beyond.

Will the company discuss the impact of the Tesla Shanghai shutdown? The EV giant’s main factory has been shut down since March 28 due to the city’s strict Covid lockdowns, which don’t seem likely to end anytime soon. That will have a big impact on Q2 production, even with the Berlin and Austin plants slowly ramping up.

Investors also will look for fresh clues about the Tesla Cybertruck, Semi and other further products. But they may not get it.

Meanwhile, Tesla CEO Elon Musk’s bid for Twitter (TWTR) also is a potential headwind. If Musk does buy Twitter, he may sell another chunk of TSLA stock to pay for it. And running yet another company could further distract Musk.

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

Market Rally Analysis

The stock market rally continues to grow more divided. The Nasdaq composite fell solidly after tumbling below its 50-day line in the prior week. The S&P 500, now clearly below its 200-day, fell below its 50-day as well.

The broad commodity sector, medicals and defense firms are leading. Insurers and REITs are holding up reasonably well. Travel names are once again coming back, with crude prices off their March peaks and consumers shifting away from goods and willing to pay high fares.

But the Nasdaq has lost more that half of its late March gains. Apple (AAPL) and Tesla are holding up OK, but they don’t look especially attractive either. As for other megacaps, Microsoft (MSFT), Nvidia (NVDA) and Google parent Alphabet (GOOGL) are nearing recent lows. Amazon.com (AMZN) and Facebook parent Meta Platforms (FB) have been struggling for months.

A rising-rate environment is tough for highly valued growth stocks. TSLA stock stands out, but this market hasn’t treated lone wolf growth plays kindly.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

A bifurcated market rally, with some sectors rising and others falling, is a difficult trading environment. Investors need to keep their exposure light and focused on leading sectors. But don’t get too concentrated in a particular area. One upside of travel stocks coming back into play is that the sector is not correlated to the energy/commodity sector.

With commodity plays, you might look for pullbacks to moving averages as chances to start or add to positions.

Depending on your trading style, you may want to take partial profits on stocks that have run up 10% or 15%, to make sure you come away from trades with a gain.

Don’t be stubborn. If your stocks aren’t working, especially those in lagging sectors, cut your losses and get out. You might think big former growth leaders can’t fall any further, but as long as a stock is above zero, it can still decline 100%.

Keep building your watchlists. Buying opportunities can come and go quickly, while market conditions can shift rapidly. So you want to be ready.

Earnings season will start kicking into high gear next week. Know when your holdings — or key rivals, supplies or customers — report results.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

YOU MAY ALSO LIKE:

Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader

Best Growth Stocks To Buy And Watch

IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today

Source link

Up Next

Northern & Shell joins Camelot in taking legal action over National Lottery

Don't Miss

Ukraine seizes 26 cars and 32 apartments of detained Kremlin ally Medvedchuk

Click to comment

Business

IMF hikes global growth forecast as inflation cools

Published

6 hours ago

January 31, 2023

epiz_31362123

The IMF has revised its global economic outlook upwards.

Norberto Duarte | Afp | Getty Images

The International Monetary Fund on Monday revised upward its global growth projections for the year, but warned that higher interest rates and Russia’s invasion of Ukraine would likely still weigh on activity.

In its latest economic update, the institution said the global economy will grow 2.9% this year — which represents a 0.2 percentage point improvement from its previous forecast in October. However, it said that number would still mean a fall from an expansion of 3.4% in 2022.

It also revised its projection for 2024 down to 3.1%.

“Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research department at the IMF, said in a blog post.

The Fund turned more positive on the global economy due to better-than-expected domestic factors in several countries, such as the United States.

“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas said, also noting that inflationary pressures have come down.

Global outlook is better but don't get too optimistic, IMF chief warns at Davos

In addition, China announced the reopening of its economy after strict Covid-19 lockdowns, which is expected to contribute to higher global growth. A weaker U.S. dollar has also brightened the prospects for emerging countries that hold debt in foreign currency.

However, the picture isn’t totally positive. IMF Managing Director Kristalina Georgieva warned earlier this month that the economy was not as bad as some feared, “but less bad doesn’t quite yet mean good.”

“We have to be cautious,” she said during a CNBC-moderated panel at the World Economic Forum in Davos, Switzerland.

The IMF on Monday warned of several factors that could deteriorate the outlook in the coming months. These included the fact that China’s Covid reopening could stall; inflation could remain high; Russia’s invasion of Ukraine could shake energy and food costs even further; and markets could turn sour on worse-than-expected inflation prints.

IMF calculations say that about 84% of nations will face lower headline inflation this year compared to 2022, but they still forecast an annual average rate of 6.6% in 2023 and of 4.3% in 2024.

As such, the Washington, D.C.-based institution said one of the main policy priorities is that central banks keep addressing the surge in consumer prices.

“Clear central bank communication and appropriate reactions to shifts in the data will help keep inflation expectations anchored and lessen wage and price pressures,” the IMF said in its latest report.

“Central banks’ balance sheets will need to be unwound carefully, amid market liquidity risks,” it added.

Source link

Business

Credit Suisse see Apple beating the Street this week for a few reasons

Published

14 hours ago

January 30, 2023

epiz_31362123

Source link

Business

Most Adani shares continue losses; founder loses $28 billion in month

Published

22 hours ago

January 30, 2023

epiz_31362123

Gautam Adani, chairperson of Indian conglomerate Adani Group, at the World Congress of Accountants in Mumbai on Nov. 19, 2022. Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to rank seventh on the Bloomberg’s Billionaire Index.

Indranil Mukherjee | Afp | Getty Images

Shares of most of Adani Group companies continued to see sharp losses for a third consecutive trading session as the company attempted to rebut short seller firm Hindenburg’s report, which accused the conglomerate of stock manipulation and an “accounting fraud scheme.”

Adani Enterprises erased earlier gains of up to 10% and last traded flat in Mumbai’s afternoon trade after the group published a lengthy response of over 400 pages to Hindenburg’s report over the weekend, saying that it will exercise its rights to “pursue remedies” to protect its investors “before all appropriate authorities.”

Adani Enterprises’ stock price remains more than 25% lower in the month to date, Refinitiv data showed. It proceeded with a secondary share sale worth $2.5 billion, which were overshadowed by a rout that wiped out a total of $48 billion as of last week’s close.

Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to seventh place on the Bloomberg’s Billionaire Index.

His net worth fell $27.9 billion year to date, the index showed. It peaked at $150 billion on Sept. 20, 2022, before falling to to $92.7 billion as of last week’s close, according to the index.

Despite small gains seen in Adani Enterprises, other affiliates of the Adani Group continued to plunge.

‘Attack on India’

Adani Group said Hindenburg’s allegations were a “calculated attack on India, independence, integrity and quality of Indian institutions, and growth story and ambition of India,” in the response it released over the weekend.

The group’s chief financial officer Jugeshinder Singh said in an interview with CNBC-TV18, an affiliate of CNBC, that the value of Adani Enterprises has not changed “simply because” of share price volatility, adding it instead lies in its “ability to incubate new businesses.”

He added that he is confident Adani Enterprises‘ follow-on public offering will be fully subscribed, calling Hindenburg’s report “simply a lie” and the timing of the report “malicious.”

Hindenburg on Monday morning described the group’s response “bloated” and claimed it “ignores every key allegation” against the conglomerate that it raised.

“Fraud cannot be obfuscated by nationalism of a bloated response that ignores every key allegation we raised,” the short seller titled its response to Adani Group.