Dow Jones futures edged higher after hours, along with S&P 500 futures and Nasdaq futures.
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The stock market rally was indecisive for most of Tuesday, but the major indexes rallied, with the S&P 500 moving above its 50-day moving average. Investors await the December inflation report on Thursday morning.
Medpace (MEDP) rose sharply on Tuesday, posting a new buy signal after a similar move at the end of 2022. First Solar (FSLR) bounced back from the 50-day line, providing early entry as well. BUT ELF Beauty (ELF) and Super Micro Computer (SMCI) tumbled after Monday’s reversal.
MEDP and ELF Beauty stocks are on the IBD Leaderboard. SMCI stock is in the IBD 50. Medpace was the IBD Stock Of The Day on Tuesday.
Tesla (TSLA) and UnitedHealth (UNH) bowed lower, as several major caps continued to struggle.
Investors should remain vigilant, especially with the upcoming CPI inflation report.
Business News
At the same time, Wells Fargo (WFC) will exit the mortgage business under regulatory pressure, CNBC reported last Tuesday. It provides loans to existing bank and wealth management clients and borrowers in minority communities. WFC stock was little changed in extended trading.
Axcelis Technologies (ACLS), which has been active during the last several meetings, said that the income for the fourth quarter in December exceeded $ 250 million vs. ACLS stock edged higher after hours.
Imp (PI) said Q4 sales topped $76 million compared to the RFID-chip maker’s previous guidance of $71.5 million-$73.5 million. PI stock, already slightly above its 50-day line, rose sharply overnight. You can see the Impinj rate in the chart if you are close to the selected date. PI stock is also on the Leaderboard.
The income season also starts to pick up at the end of the week. Taiwan Semiconductor (TSM) on Thursday morning. On Friday, JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C) and Wells Fargo both report ahead of the open, with Delta Air Lines (DAL) and UnitedHealth.
Dow Jones Futures today
Dow Jones futures rose a fraction of the fair value. S&P 500 futures and Nasdaq 100 futures rose 0.1%.
Remember that overnight movements in Dow futures and elsewhere do not necessarily translate into actual trading in the next trading session.
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Stock Market Rally
After Monday’s disappointment faded, the stock market rallied Tuesday afternoon, closing near session highs.
The Dow Jones Industrial Average rose 0.6% in Tuesday’s market trade. The S&P 500 index rose 0.7%. The Nasdaq composite rose 1%. The Russell 2000 small cap rose 1.5%
Tesla stock fell 0.8% after jumping 5.9% on Monday. Shares turned higher on Friday after settling in a bear market low at 101.06 after the EV giant announced big price cuts in China and other Asian markets. TSLA stock needs a lot of repair.
Tesla has applied to Texas for a major expansion of its Austin assembly plant, the Austin Business Journal reported last Tuesday. Tesla Austin is still climbing to its existing capacity.
UNH stock fell 0.8%, hitting its worst level since last June. Dow Jones health insurance fell 8.3% already in 2023, after ending 2022 in good shape. UnitedHealth’s earnings and guidance on Friday will be important for the field of sudden war.
US crude oil prices rose 0.7% to $75.12 a barrel. Natural gas prices fell 6.9%.
The 10-year Treasury yield jumped 10 basis points to 3.62% after jumping 20 basis points in the previous two sessions.
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ETFs
In growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.15%. Over the past month, the price of the iShares Expanded Tech-Software Sector ETF has changed by +0.1%. The VanEck Vectors Semiconductor ETF (SMH) rose 1.3%, just above the 200-day line after breaking through the 50-day on Friday. TSM stock is a major holding in SMH.
During the last month, the price of ARK Innovation ETF has changed by +2.5% and +3.6% during the week. Tesla stock remains a major holding at Ark Invest, with Cathie Wood strengthening her position in recent weeks.
SPDR S&P Metals & Mining ETF (XME) rose 2.5% for the week. The US Global Jets ETF (JETS) rose 2.4%, along with the DAL fund. SPDR S&P Homebuilders ETF changed to +1%. The Energy Select SPDR ETF was up +0.7% for the week. The Health Care Select Sector SPDR Fund ( XLV ) closed up 0.8%, with UNH stock holding XLV higher.
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Market Rally Analysis
The stock market rally spent the morning around the break, but ended Tuesday with a strong performance.
The S&P 500 rose above its 50-day line. The 200-day average is lower than that.
The Dow Jones has returned to a test of the 50-day line after moving above that key level on Friday. The Nasdaq rose above the 21-day line with the 50-day line not far behind.
The Russell 2000 is back above the 50-day line, below the 200-day.
The S&P MidCap 400 rose on Tuesday after finding support at the 50-day. This was after jumping above the 21-day, 50-day and 200-day lines on Friday. The Invesco S&P 500 Equal Weight ETF tracks RSP’s stock price.
The RSP and the MidCap 400 feature a range of caps such as apple (AAPL), Tesla and UNH stock weighed on the market.
The long-term stock market rally may not last until there is clarity on when the Federal Reserve will stop raising rates. Markets are eagerly anticipating a quarter-point increase at the February 1 policy meeting and again at the end of March.
Thursday’s CPI inflation report may cap expectations for a quarter-point increase. Inflation should be lower in the coming months, unless the year-on-year comparison is tight.
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A mixed fraternity
Several stocks have been showing buy signals in recent days and weeks. But soon most of them panicked. In some cases, such as MEDP stocks, they return a few days later.
Medpace jumped 5.9% to 223.29 on heavy volume, rebounding from the 50-day line and clearing the December 29 highs, when MEDP tried to break away.
First Solar rose 7.4% to 171.01, continuing its mini-win. The move from the 50-day line offered early entry into the new camp, but now it’s a bit extended. But the official buy point of 173.78 is not far away.
Other names keep changing.
ELF stock had a promising break on Friday, but gave up most of those gains on Monday and jumped 8.3% on Tuesday to 51.15, dipping below its 50-day line and breaking a new low. bottom.
SMCI stock rallied Monday morning, offering an early entry, but closed just short. On Tuesday, shares were down 7.55%, below the 50-day line, following reports of short sellers.
Many other stocks are hovering around potential buys.
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What to do now
The stock market index is still valid, but the major indexes, sectors and especially the major stocks are volatile. Thursday’s inflation report could trigger big gains, with major indexes pushing to higher levels. But it can also go the other way.
Investors should be careful with exposure and be cautious of new purchases, especially before the CPI report.
If you are making a new purchase, know your exit strategy before you go in. Consider taking a quick profit share to lock in some profits.
This is still a window market. But there are many interesting stocks to explore from various fields. Prepare these watch lists.
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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