Dow Jones futures edged lower overnight, while S&P 500 futures and especially Nasdaq futures lost ground, with Microsoft (MSFT) and parent Google alphabet (GOOGL) headlines a big earnings night.
X
The stock market had another strong session, as Treasury rates and the dollar retreated. But the S&P 500 and Nasdaq have reached key resistance levels. Investors should participate in a confirmed increase, but not in a hurry.
Intel (INTC) IPO price for its own Mobileye (MBLY) self-driving cars on Tuesday night, slightly exceeded the forecast. Twitter (TWTR) was closer to its reception price on the last signal that Tesla (TSLA) CEO Elon Musk will close the deal on Friday.
Microsoft and Google kicked off their tech megacap earnings call Tuesday night. Enphase Energy (ENPH) and Chipotle Mexican Grill (CMG) also reported.
Microsoft’s earnings and revenue, but MSFT stock fell sharply overnight due to disappointing cloud revenue and weak guidance. Google stock plummets after missing views. Enphase met with strong results. CMG stock initially rose, but then turned lower.
Microsoft and Google stocks are on the IBD Long-Term Leaders list. ENPH stock is in the IBD Big Cap 20.
Intel has set the Mobileye IPO price
Intel sold 41 million Mobileye shares at $21 a pop, up from expectations of $18-$20. It grossed $861 million. This valued Mobileye at $16.7 billion, well below the $50 billion that Intel had previously expected. The chip maker paid $15.3 billion for Mobileye in 2017.
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Musk-Twitter Deal Latest
The equity investors in Tesla CEO Elon Musk’s Twitter received a letter today, CNBC reported on Tuesday, the latest sign that Musk will close the $44 billion deal on Friday.
Bloomberg reported that Musk told the bank that he plans to shut down Twitter on Friday. Twitter stock added to intraday gains, closing up 2.6% to 52.84, not far from the contract price of $54.20. Tesla stock briefly pared gains Tuesday afternoon, but ended up 5.3% higher at 222.41.
Concerns that Musk would need to sell more shares to pay for the Twitter deal weighed on TSLA stock.
The video included in this article discusses Tuesday’s collection and analysis Shockwave Medical (SWAV), Excelerate Energy (EE) and Dollar General (DG).
Dow Jones Futures today
Dow Jones futures fell 0.3% vs. S&P 500 futures fell 1%. Nasdaq 100 futures lost 2.1%. Microsoft’s stock is Dow Jones, S&P 500 and Nasdaq giant. Google and Enphase stocks are components of the S&P 500 and Nasdaq.
Remember that overnight movements in Dow futures and elsewhere do not necessarily translate into actual trading in the next trading session.
Join IBD’s experts as they analyze stocks to watch in the stock market on IBD Live
Stock Market Rally
The stock market rally continued on Tuesday, with technology and small caps leading strong sessions.
The Dow Jones Industrial Average rose 1.1% in Tuesday’s market trade. The S&P 500 index gained 1.6%. The Nasdaq composite fell 2.25%. The small-cap Russell 2000 jumped 2.7%.
The 10-year Treasury yield fell 13 basis points to 4.11%. The decline in Treasury yields also weighed on the US dollar. However, the two-year Treasury rate, more closely linked to Fed policy, fell 3 basis points to 4.47%.
US crude oil prices rose 0.9% to $85.32 a barrel. Natural gas futures jumped 8%, continuing their retreat after plunging 23% last week.
ETFs
Among the best performing ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.55%. Shares of the iShares Expanded Tech-Software Sector ETF changed by +2.5%. MSFT stock is a great IGV holding. Over the past month, the price of VanEck Vectors Semiconductor ETF has changed by +1.66%.
SPDR S&P Metals & Mining (XME) rose 1.8%. SPDR S&P Homebuilders (XHB) rose 4.35%. Over the past month, the price of the Energy Select SPDR ETF has changed by +0.1%. The Health Care Select Sector SPDR Fund ( XLV ) added 0.8%.
Reflecting stocks with a more predictable history, the ARK Innovation ETF (ARKK) jumped 6.7% and the ARK Genomics (ARKG) rose 5.4%. The Tesla Stock fund has a large holding in Ark Invest’s ETFs.
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Basic income
Microsoft’s revenue and earnings exceeded its Q1 financial outlook. Cloud computing revenues have led the way but have fallen short of certain targets. The software giant then warned about Q2 revenue for advertising, PC and currency.
MSFT stock was traded in overnight trading. Shares rose 1.4% to 250.66 on Tuesday, rising to a 50-day line. But Microsoft stock is well below its 200-day line and still not far from market lows. Cloud software stocks fell on Microsoft’s results.
Google’s revenue and earnings are both missing. YouTube revenue fell, while online advertising rose just 2.5%. Cloud computing revenues have exceeded estimates. GOOGL stock has fallen in a long move. Shares rose 1.9% Tuesday to 104.48, also closing at the 50-day line. But, like Microsoft, Google stock is not far from the bottom of the market, with a distance of 200 days.
The results of Microsoft and Google cloud-computing may indicate the development of Amazon Web Services Amazon.com (AMZN) on Thursday night. AMZN stock fell slightly overnight.
Enphase’s earnings are rising due to the negative earnings outlook. ENPH stock was up nicely overnight. Enphase stock rose 4.85% to 265.59 on Tuesday, retreating above its 21-day line. The share may be starting to build to the right side of a new base but still below the 50-day line.
First Solar (FSLR), which reports Thursday night, was little changed on Enphase’s earnings.
Chipotle’s earnings have been impressive, with same-store sales and margins flat. CMG stock edged lower in extended trading amid concerns about future margins. Shares rose 2.5% on Tuesday to 1,584.02. Chipotle stock is nearing the 50-day line as it operates on the right side of a short-term basis with a buy point of 1,754.66, according to MarketSmith analysis.
Boeing (BA), General Dynamics (GD), Waste management (WM) and Hilton Worldwide (HLT) on Wednesday morning.
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Market Rally Analysis
Stock market volatility continued to increase, with lower Treasury yields and the US dollar providing a tailwind for equities.
The Nasdaq and small caps led gains on Tuesday. The Dow Jones retreated on Tuesday but remains the leader of the rally, pushing higher than the 50-day line. The S&P 500 and Russell 2000 are close to this key level. The Nasdaq still has a short distance to reach the 50-day mark. But the S&P, Russell and Nasdaq are above 10-week lines.
It is not yet clear if this is just another rally. Will the S&P 500 and then the Nasdaq break above the 50-day moving average. And if so, can the major index clear the 200 day?
On the other hand, several growth stocks showed strong activity, including Shockwave, DoubleVerify (DV) and Roblox (RBLX).
These join medical leaders, including biotechs, health insurers and drug distributors. Auto parts dealers are doing well.
Energy stocks continue to perform well.
Treasury yields, earnings and economic data could derail this recent rally.
Microsoft and Google reported on Tuesday night, with the Meta Platforms (META), apple (AAPL) and Amazon earnings this week.
It’s no coincidence that Microsoft, Google, Amazon and Apple stocks closed Tuesday at or below their 50-day line. Even Meta stock, which nearly hit a bear market low on Friday, is back at its 50-day low.
Microsoft, Google and Amazon are ready to retreat from this basic level. Futures index the S&P 500 and the Nasdaq will also do so at Wednesday’s open.
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What to do now
Stock market certified stocks are profitable, with several stocks showing buy or break signals, including high-growth names.
Therefore, investors should participate with caution in this fund, taking positions in quality stocks or broad-based ETFs. Step by step. If your location and market collection are working, you can add gradually.
A large index facing a series of measurements is another reason to enter, not run.
Be prepared to take profits or cut losses quickly.
Continue working on the following list. Several days of rising markets bring more stocks into position.
Read The Big Picture every day to stay in tune with the direction of the market and stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market reforms and more.
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