Stock Market Rally Awaits Fed Chair Powell, Key Economic Data; Apple extends Slide

Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures, as Fed Chairman Jerome Powell and key economic data kicked off.


The stock market rally closed mixed on Tuesday apple (AAPL) once again dragged down the major indexes (AMZN) and Tesla (TSLA). Meanwhile, Apple’s Dow giants Boeing (BA), Chevron (CVX) and Goldman Sachs (GS) close to purchase points.

Hewlett Packard Enterprise (HPE) and NetApp With earnings reports headlined by (NTAP) on Tuesday CrowdStrike (CRWD) and Work day (WDAY) kicks off big program reports this week.

Shares of HPE rose modestly in overnight trading after HPE’s earnings beat views. HP Enterprise shares are trading on a long cup base above their 200-day line. NTAP stock took a big hit on weak NetApp earnings and guidance. WDAY stock soared overnight in Q3 and $500 million was repurchased. Shares of CRWD fell despite mixed views in Q3 as subscriptions came to light and the cybersecurity firm forecast a Q4 earnings loss.

On Wednesday morning, ADP will release its November employment estimate from the private payrolls report. The Labor Department will release job openings in the October JOLTS report. Jobs are being closely watched by Fed chief Jerome Powell, who is due to speak on Wednesday afternoon.

All of this comes ahead of Thursday morning’s Fed’s favorite inflation gauge, the PCE price index, Friday’s November jobs report, as well as a host of other notable economic releases.

Until there is more clarity on the economy and the Fed’s rate hike outlook, investors should be cautious about opening new positions. If anything, they may want to lighten their position in the very short term.

CVX stock is on the IBD Leaderboard. BA shares are on SwingTrader.

Fed Chairman Powell speech

Fed Chair Jerome Powell will speak at the Brookings Institution on Wednesday at 1:30 PM ET. It is expected to reinforce expectations that the central bank will move to a 50 basis point interest rate hike on December 14. Markets see a 67.5% chance of a half point move, but still a decent chance for a fifth rate hike by the Fed. 75 basis points. However, it will likely indicate that interest rate hikes will continue into 2023.

Whatever Powell says, the economic data will pass quickly. If inflation begins to cool significantly and labor markets ease, even the most hawkish Fed policymakers would prefer to slow the pace of rate hikes and end sooner than markets expect. Warm price and employment data will bolster the judgment of many Fed doves. Of course, the economic data in the coming days may show mixed results or marginal improvement.

Dow Jones Futures today

Dow Jones futures, along with S&P 500 futures, rose 0.1% relative to fair value. Nasdaq 100 futures rose 0.1%.

The 10-year Treasury yield fell 1 basis point to 3.74%. Crude oil futures rose 1%.

China’s official manufacturing index fell 1.2 points to 48 in November, further below the neutral level of 50, and the reading read 49. The services index fell to 46.7 against forecasts for 48. China’s Covid lockdown has hit the economy hard.

Remember that an overnight move in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.

Join IBD’s experts as they analyze the stocks that made the most of the stock rally on IBD Live

Stock market rally

After a sharp sell-off on Monday, the stock market rally closed mixed on Tuesday.

The Dow Jones Industrial Average closed slightly above the loss in stock trading on Tuesday. The S&P 500 index fell about 0.2%. The Nasdaq stock market fell by 0.6%. The small-cap Russell 2000 rose 0.3%.

Apple shares fell 2.1%, the third consecutive significant decline, as China’s Covid cases, lockdowns and protests weighed on the tech giant. Shares fell 2.6% on Tuesday, falling below their 50-day moving average. Above the 50-day line is 200-day resistance for AAPL stock. Apple has seen unrest at the giant Foxconn iPhone assembly factory in China.

Amazon shares fell 1.6% and Tesla shares fell 1.1%, both retreating from near their 21-day lines. Both are relatively close to bear market lows.

The price of crude oil in the United States increased by 2.4% to 79.62 dollars per barrel. Crude oil futures hit their lowest levels of the year on Monday.

The 10-year Treasury yield rose 5 basis points to 3.75%.


Among the top ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 0.2%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) rose 0.5%. The iShares Expanded Tech-Software Sector ETF ( IGV ) lost 0.8%. VanEck Vectors Semiconductor ETF ( SMH ) fell 0.3%.

The SPDR S&P Metals & Mining ETF (XME) gained 2.3% and the Global X US Infrastructure Development ETF (PAVE) gained 0.1%. The US Global Jets ETF (JETS) rose 1.8%. The Financial Select SPDR ETF ( XLF ) rose 0.6%. The Healthcare Select Sector SPDR Fund ( XLV ) fell 0.25%.

Reflecting more speculative story stocks, the ARK Innovation ETF ( ARKK ) was down 0.5%, while the ARK Genomics ETF ( ARKG ) was down 0.4%. Tesla stock is a major holding in Ark Invest’s ETFs.

Five Best China Stocks to Watch Now

Dow stocks near buy points

Boeing shares rose 2% to 175.32 on Tuesday, above a cup-base buy point of 173.95, according to MarketSmith analysis. Shares traded heavily on light volume near a buy point after a big rally on optimism for the aerospace giant. Analysts expect Boeing to return to profitability in 2023 after four years of losses. The last break in the BA fund reached the 21-day line.

Chevron shares rose 1.45% to 180.94, just below a 182.50 buy point and just above the 21-day line. CVX shares have been trading around that official buy point all month. An early entry near 167 on October 19 was probably a safer bet initially. But Chevron shares are looking more interesting now that they’re at day 21 and no longer extended past 50.

Shares of GS rose 0.35% to 383.71 on Tuesday. The investment bank has 389.68 buy points from a 35%-deep handle stand base through November 2021. Investors may also see the recent break as a shelf just above the buy range from the bottom base that Goldman shares cleared. early November. The 21-day moving average is close to holding, while the 50-day line is starting to gain ground. The relative strength line is at a multi-year high, reflecting the outperformance of GS stock relative to the S&P 500.

Market Rally Analysis

The stock rally is backed by key technical tests and economic data, along with uncertainty over China’s Covid policies.

The S&P 500 is extending a pullback just below its 200-day moving average, but is still above its 21-day line. After falling below the 200-day and 21-day lines on Monday, the Russell 2000 rose above the 21-day.

Lagging Nasdaq fell below its 21-day line and is nearing its 50-day line.

Apple shares, Tesla and other megacaps are gaining weight in the Nasdaq and S&P 500 index.

The Invesco S&P 500 Equal Weight ETF ( RSP ) is still above its 200-day moving average.

But don’t overestimate Apple’s influence. Many leading stocks are testing or falling below buy points or making good gains.

The silver lining is that the stock market does not adjust to Fed speeches and important economic data. This could mean that if there are no negative surprises, the markets can go higher and take bigger gains if the upcoming headlines are positive.

But the market rally will do what it will.

Market Timing with IBD’s ETF Market Strategy

What to do now

There aren’t many stocks that are flashing buy signals as markets pull back. Investors should probably wait for Powell’s speech and the release of economic data before making significant new purchases. Investors may want to take at least a partial profit from the winners, especially if the winning stocks are pulled back for points.

If the market rally goes higher soon, a large number of stocks will appear to be in the works. But if the major indexes drop significantly from here, many interesting stocks will start to look damaged today.

So investors need to stay busy and nimble. Keep your watchlists up-to-date, but also have exit strategies for your holdings.

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

Follow Ed Carson on Twitter @IBD_ECarson for stock updates and more.


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